The Daily bulletin. [volume] (Honolulu [Hawaii]) 1882-1895, 1893-06-08
1T WAS A LAND BOOM.
One of the Causes Of the Crash in
Australia.

this city from Australia, says the
San Francisco Chronicle, find them
selves in very awkward position.
They left home before the crash
came with drafts on Australian
banks or letters of credit. These
they find, to their great embarrass-
ment, local banks will not accept.
Many will return on the steamer
and strive to save something. A
few individuals more fortunate will
continue their journey to the
Worlds Fair city.
Some of the passengers added to
the stories told in yesterdays Chroni-
Gle. Most of them take their trou-
bles philosophically and hope for
the best.
One of the recent arrivals by the
Monowai, an intelligent Australian
of good position and standing in
the Colonies, was questioned yester-
day as to the cause of the bank dis
asters. "To give you details and
full reply would take too long," said
he. However, l can give brief
outline of the situation. Five or
six years ago the Australian banks
had more money on hand than they
knew what to do with. They would,
of course, never acknowledge that
fact, but at the same time they
simply jumped at any chance of
granting an overdraft on reasonably
good security. At that time a few
land spectators started what is
now known throughout the Colonies
as the land BOOM To show that
men of straw may mention that one
of the first and most successful was
Sir Matthew Henry Davies, Speaker
of the Legislative Assembly of Vic
toria. Their plan was to purchase
a good-sized farm or any block of
land near the city; then they got it
subdivided into streets and building
allotments, and put the lots up at
auction at so much per foot on the
installment plan. 1t was generally
necessary to pay ridiculously small
deposit and the balance over one,
two or more years, as the case might
be. So strong is the Britisher's
wish to own a home of his own that
thousands of artisans and others
rushed in with their small deposits
and secured allotments. Every
Saturday sales took place and one
could see four-horse drays and other
vehicles waiting to take purchasers
or their friends out to the ground
Hundreds went only for the drive
and caught the land mania on the
ground, especially when the free
lunch had been produced. This
lunch, by the way, was great at
traction and beer was never wanting
if desired. So great was the success
of these sales that rush was made
for anything approaching good
building land all round the cities.
Prices went up to an absurd value,
towns were planned out on bare
farming land and syndicates were
formed almost every minute of the
day to buy some block for cutting
up. Then the turn came and this is
where the banks came in. With the
upward rush no one could go wrong
and man whose name was not alb
solutely bad had only to go to his
bank for assistance.
"For example: A friend of mine
bought large estate for the pur-
poses of cutting up for $1,000 or
$4,000. He paid f25O deposit, $500
to be paid in one month, balance in
three, six, twelve, eighteen and
twenty-four months. He lodged the
conditions of sale with his banker as
security for part of the second pay
ment, f2OO of which the bank was
compelled to pay in order to pro-
tect themselves, as they looked to
the resale of the place to recoup
other advances.
"The third payment they had to
make entirely and the fourth they
stopped-the land was forfeited and
bank and customers lost the profit
of f16OO, for which the property was
sold in three or four months. Never
theless the banks, as rule, backed
their clients up in this whole specu-
lation, and therefore, as l. have al
ways said, the banks are now suffer
ing, and very largely through their
own folly. Nearly every Australian
bank has safes full of deeds and not
sufficient gold to meet emergencies.
Many of the banks which have closed
their doors are splendid institutions
and can pay every cent they owe,
but they have their grips full of
paper and not enough gold for i'm
mediate demands. The lesson will
do them good, but it is very incon-
venient TO most Australians and alb
solute ruin to many. As for myself,
| am all right-thank goodness my
two banks are still safe and have
too much confidence to withdraw
sixpence."
r. Parkinson, another Australian,
told an interesting story of how he
missed being at the mercy of a
closed bank. He had been banking
for some time with the Commercial
Banking Company of Sydney. One
morning he paid visit to that in
stitution and asked for his balance,
saying he wished to withdraw it.
The clerk to whom he had spoken
treated him in a very brusque, dis
courteous manner, and, feeling some
what annoyed, Mr.. Parkinson drew
out check payable to the Bank of
New South Wales. Both the clerk
and the paying teller in turn desired
to know why he had not asked them
to prepare the draft which they pre-
aENFl I,,N II. j Il