The morning call., 1893-04-07
LIQUIDATION IN AUSTRALIA.

The failure Of the Commercial Bank of
Australia Is another step In the curious
financial liquidation which is going on in
that part of the world. The bank was
larger than any bank in this city. having a
paid-up capital of S6.0O0,0 600, and a deposit
line of SCI, 600. eco; though the population of
the Province Of Victoria is less than that
Of the State of California. 1t had done
fine business and had accumulated a re-
serve of nearly S4.0OO,O00. 1t had branches
in the chief commercial cities of England,
and in all the leading colonial towns. its
credit has always been Al.
In seeking the causes of its failure, we
must go back few years. Some fifteen or
twenty years ago the colonists resolved to
undertake a system of internal improve
ments. They constructed wafer works for
the city of Melbourne, state school build
ings and docks, and above all a system of
railroads in excess of public wants, radi-
ating from main trunk line leading from
the city Of Melbourne to the Murray River.
If they had taxed themselves for part of
the cost Of these various improvements
ii would have been better. Unfortunately
their credit was SO good. and English capt.
talists are so fond of investing money under
the British flag, that Victoria found she
could borrow in London all the money she
wanted at a reasonable rate of interest.
She put forth her bonds accordingly; put
them forth with such lavish hand that at
the last accounting to the provincial Parlia-
ment, in 1891, the aggregate debt was found
to be e43, SIC, 265, say S2IS, 00O eco, to be COL
lected from l, lao, All people. 1t goes with
out saying that no people can carry such q
burden as this, except in times of unusual
prosperity and extraordinary gains, and
that the moment any accident interrupted
the even tenor of general well being the
burden would become too heavy to be
borne.
The accident occurred in 1890. A dispute
arose between the sailors union and the
ship-owners, and the crews Of the steamers
sailing out of Australian ports struck. The
cause of the sailors union was taken ND BY
the miners unions. the sheep-shearers'
unions and all The other unions in the PROV
inces. Instead Of allowing the men in
some trades to continue to work. SO as TO
earn money to support the men on strike,
as IS the practice in this country, the
Trades Council OF Australia ordered out
the men In every trade, so that, when the
strike ended, there was not union treas
ury that was not empty. Meanwhile. the
sympathetic strike had parayzed the wool
and the coal trades, and for six months the
sheep-owners and colliers earned no money,
Thus. when the contest ended. everybody
In Australia, from Adelaide to Brisbane,
landowner and laborer alike, was penni-
less. Events then pursued the usual course.
When the tax-gatherer came around people
went to the banks to borrow, and those
who had deposited their savings in bank
drew them out A couple of years ago
there was 100000 on deposit in the
savings banks of Melbourne, and $780,
GoOO00 In the commercial banks. These
boards were soon depleted under the pres
sure oil necessity, and when the public
necessities became still more pressing,
banks had to suspend. That is the story Of
the Bank of Australia.
How the colony will work itself out is
problem.