364 Returns required to be furnished. Distribution of DISTRIBUTION OF BANKS. the strong necessity for entirely revising the conditions under which deposits may be taken from the general public. All institutions transacting the business of banking are required by law to furnish quarterly statements of their assets and liabilities in a specified form, and from these statements and the periodic balance-sheets the tables in this chapter have been compiled. The returns furnished by the banks, though in compliance with the laws of the Colonies, are by no means so satisfactory as could be desired, being somewhat out of date, and cannot be taken without question as indicating the stability or otherwise of the banks. Thus, in the subsequent table, the total liabilities of the banks are given as £117,994,440, and the assets £169,764,673, showing a surplus of assets of £51,770,233. If the returns gave all the facts in relation to the operation of the banks, this surplus would be represented almost entirely by capital or funds provided out of their own resources, but the capital and reserve funds amount only to £24,809,251, so that there is a balance of about £27,000,000 to be otherwise accounted for. This sum represents deposits obtained in the United Kingdom, and used in their Australian business. The total British deposits with Australasian banks, however, is probably not less than 40 millions, for those held by the banks which have offices in New South Wales amount to about 30 millions. Of the twenty-five banks operating in Australasia at the close of 1892, fourteen had offices in New South Wales, thirteen in Victoria, eleven in Queensland, nine in South Australia, five in Western Australia, four in Tasmania, and six in New Zealand. There was only one bank doing business in each of the seven colonies, two that did business in six colonies, one in five colonies, three in four, two in three, four in two, and twelve banks did not extend their business beyond the limits of one colony. The liabilities and assets of the twenty-five banks operating in the different colonies during the December quarter of 1892 are shown in the following table; the figures must be taken with the ASSETS AND LIABILITIES OF BANKS. 365 qualifications already given. The following figures give the lia- Liabilities of Banks. Certain assets of small amount, not classifiable under any of the sub-heads of the table, have been included in the total, and in the case of one Colony an over-statement of the assets of some of the banks has been rectified. Assets of Banks. 366 CAPITAL AND RESERVES OF BANKS. Liabilities consist chiefly of Deposits. Capital and The preceding table shows that over 95 per cent. of the Australasian liabilities of the bank consisted of deposits, viz. :— £112,403,524 out of £117,994,440. The statements by banks in each colony, with the exception of Tasmania, distinguish between deposits at call and deposits bearing interest. In Tasmania, although not obliged by law to do so, the same distinction has been made by every bank but one; and assuming the proportion of deposits at call to total deposits in that bank to be the same as in the case of the other banks doing business in Tasmania, the total deposits at call are as stated in the table, viz: -£28,687,780, or somewhat over 25 per cent. of all deposits. The total shareholders' capital invested in all the banks amounts to £15,988,754, and the reserve profits £8,820,497. The capital, profits, and other information regarding banks are given below. The institutions are not stated separately, but grouped together under the heading of the colony or country in which their head-quarters are situated. December quarter, 1892 : : The figures refer to the Metallic reserves. The following table shows the metallic reserves held by the banks as against their total Australasian liabilities, and also against their liabilities at call, viz., deposits at call and note circulation. THE BANK CRISIS. The table, however, cannot be taken as complete, as those banks which receive deposits in England and elsewhere, and which do not include such deposits or liabilities, are shown in too favourable a light : 367 New South It will thus be seen that New South Wales holds the weakest Weak position of position in the proportion of cash reserves both to total liabilities Wales. and liabilities at call. BANK CRISIS. The foregoing figures relate to the affairs of the banks prior to Financial crisis. the close of 1892, but since that date very considerable changes have taken place in the banking position. Distrust in companies receiving deposits had been growing for some time, and the failure of various land companies and building societies during the year 1891 created a very restless feeling, which was accentuated by the failure of the Mercantile Bank of Melbourne. Constant withdrawals of deposits were made from nearly all the banks, and many institutions felt that they would not long be able to meet the drain. The first large institution to suspend payment was the Commercial Bank of Australia, and after that failures followed in rapid succession until thirteen banks had 368 RECONSTRUCTION SCHEMES. Liabilities of suspended Banks. closed their doors. The interests involved in the thirteen banks which have closed are as follows: Due to the Shareholders £13,995,451 Due to the Public Cash and Investments.. £17,633,626 Advances, &c. 91,982,598 Bank Premises 84,901,986 3,740,626 Position of the other Banks. or a total liability of £105,978,049, including note issues equivalent to £2,767,883, and apparent assets of £106,276,238. The latest available figures for the twelve banks which survived the panic are as follows: Amount of advances. Reconstruction schemes. These institutions had made advances to customers to the extent of £61,347,586. The suspended banks have almost all put forward schemes for reconstruction, for the most part based on an extension of the maturing dates of deposits, either by the exchange of that form of security for preference shares or for other deposit receipts at long dates, some being as distant as fifteen and twenty years. At the same time calls have been made on shareholders for over five millions of money. The reconstruction schemes of the recently-suspended banks have, with some slight modifications, been approved by both creditors and shareholders, and by the time this volume is issued the whole of the institutions which closed their doors subsequent to the 5th of April, 1893, it is hoped, will have resumed business. |