The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1894-12-13
A FINANCIAL CRISIS.
Business Is at q Standstill in
Newfo midland.
THE MINISTRY HAS RESIGNED.


St JONAS. ~. r, Dec. 1.-TWO large
English firms. who Fold most Of New
fcundland's paper. and who are expect-
ed % fan on Monday. are stin holding
out. Their survival greatly adds TO the
hope that tie Union bank VIII be able
10 continue business. Notes OF that
hank are more In demand today. but
trade Is practically dead. The govern
meuk decided yesterday that It's posi-
ton was untenable. and sent letter
20 the beaders OF the liberal party offer
ing 10 resign or to retain Office IL sup
ported In the financial question The
government offered to anSalganlate with
the liberals until the crisis is over. The
liberals made no reply 10 this letter,
but two hours later waited on the gov
ernor and demanded that he dismiss
the ministers. The governor refused.
but. acting on the advice OF the imper-
ial ministry, he summoned the assem-
bly, TO meet on Saturday.
The governor has received dispatch
from the imperial ministry, stating that
IT declines 10 interfere unless the col
ony IS willing 10 accept a royal COM
missison TO investigate its affairs. The
ministers. knowing their defeat IS Ger
tain should they face the assembly, ten
dered their designations TO take effect
tomorrow. Mr.. Greenway. leader OF the
opposition, has been called on by the
governor to form a cabinet. His task
Is an almost impossible one. The gov
eminent statements show that interest
on the public loans-$25o. o00 will be re-
CURED to be furnished in London on
January l. This amount cannot now be
obtained. and therefore the colony must
default payment, unless some arrange
ment is speedily made.
Reliable information tonight Is TO the
effect that the safety of the Union bank
is assured
Halifax, ~. s.. Dec. Traditional de-
tails of the financial and commercial pam
10 in Newfoundland are as follows: The
condition OF the Commercial bank had for
some time been a subject of suspicion. but
the statement Of the Union bank TO its
shareholders was Of the rosiest possible
hue. Doubtless the banks suspended I'M
der the clause in their charter which per-
mies them 20 TO do so. whenever they
deem IL wise. for period of sixty days
There is no president OF either OF the two
st. Johns banks. the members Of the
board taking the position In weekly rota-
ton. There is double liability OF share
holders. The government savings banks
are largely awaited or by the people TO de-
post theSr earnings. interest being allow
ed at the rate of 4 per cent Large
amounts of these deposits are loaned to
the Union or Commercial banks. Govern
ment bank notes are issued. and the only
amount OF American and English gold
bank notes AMI some silver coin. is the
notes OF the two suspended banks. Pres
sure was brought to bear upon the banks
by the government for a return Of these
deposits and the furnishing OF ample Sc
curity. but the Efforts In this direction
were only partly successful. The deposit
ors In the suspended banks need not fear
that every cent win not eventually be paid.
but IL the large government depositors
were to demand their money II is hard to
see where II would come from just now
The notes OF the suspended banks would
no doubt be taken. and there is not much
other security available. The bank as
sets are ample If they were realized
They consist however. of the security af-
forded by fishing gear and floating prop
erty-generally property which cannot
well be turned into cash For ten years,
outside OF the building boom. trade IN
Newfoundland has not been renunerative
and the flsheriese Of the past two years
have been almost a blank. The banks
have felt the pressure OF this bad busl-
ness. They have been attempting to car
~ the merchants in many Instances. and
now the result has appeared. The Com
mercIal bank was established in 1887. At
the end OF 1898 its stock was 500. 900. in
$500 shares. IT had a reserve OF 500. coo
and il paid dividend Of Il per cent Its
notes in circulation on June 80, 1892
amounted to $3.50. ooo The Union bank, es-
tabhshed in 1854, was a much larger ard
more prosperous concern. During the
first eighteen years CT its existence its
average dividend and bonus was II IL per
cent. In 1872 its reserve had become so
large that a special bonus OF 30 per cent
was divided for many years. or q per
cent interest 20 the original shareholders
on their investment At the close Of 1893
its capital was s456, coo. IN $50 shares. and
It's reserve $4,000. Its note circulation
was Ss0S, l52, and for the last complete year
IL paid Is per cens dividend and bonus
The Union and Commercial are the only
two chartered banks. but there IS a gov
srn-nent savings bank in which 500 peo-
pie have more than 800. 900 deposited
This bank IS managed by the government
and the deposits are guaranteed By the
revenue OF the colony. It's profits form a
sinking fund for the reduction OF the
public debt. and within the past fifteen
or twenty years 5000 of the debt has
been wiped out from this source.