Bank of Australia

Not to be confused with Bank Australia.

Bank of Australia
Company typeBank
Founded1826
Defunct1843
Headquarters
Sydney
,
Australia
Area served
Colony of New South Wales

The Bank of Australia was a failed financial institution of early colonial New South Wales. It was formed in 1826 and collapsed in 1843.

Founding

The Bank of Australia was formed in 1826 by a producers' and merchants' group as a rival to the Bank of New South Wales.[1]: 333  The bank opened on 3 July 1826 in George Street, Sydney.[2] The first directors of the bank were: Thomas Macvitie (managing director), Edward Wollstonecraft, John Macarthur, Richard Jones, Thomas Icely, John Oxley, George Bunn, W.J. Browne, Hannibal Macarthur, James Norton, and A.B. Spark.[3]: 196 fn 44 

It was dubbed the "pure merino" bank because its share register included the plutocracy of the colony, but excluded the ex-convicts who had been associated with the Bank of New South Wales.[4]

1828 bank theft

Main article: Bank of Australia robbery

In September 1828, thieves tunnelled into the Bank of Australia in Lower George Street, Sydney and stole about £14,000, described in 2008 as "the largest documented bank theft" in Australian history (in relative values and expressed as a proportion of GDP).[5]

Collapse

When investors responded to the depression of the late 1830s by the abrupt withdrawal of capital, leading to a chain of insolvencies, a number of colonial banks found that their unrestricted lending had sent land prices soaring as speculators borrowed to invest, especially in urban areas. When the banks called in these loans further insolvencies occurred, and a number of banks, including the Bank of Australia, failed in 1843.[6] A number of leading colonial figures lost their fortunes, with many taking advantage of the Insolvent Debtors Act 1841.[4]

References

  1. ^ Brian Fitzpatrick, British Imperialism and Australia 1783 – 1833 : An economic history of Australasia (1939, London, George Allen & Unwin Ltd).
  2. ^ "On this day", The Daily Telegraph, 3 July 2010, p 36 via factiva accessed 21 September 2011.
  3. ^ Sydney James Butlin, Foundations of the Australian Monetary System, (Sydney University Press, Sydney, 1968).
  4. ^ a b Vic Carroll, "The old, old story: the rich get richer while the rest go under", The Sydney Morning Herald, 22 May 1992, p 13 via factiva accessed 16 September 2011.
  5. ^ Mike Scanlon, "Crime of the centuries", The Newcastle Herald, 7 February 2009, p 10 via factiva accessed 21 September 2011; book review: Carol Baxter, Breaking The Bank (Allen & Unwin, 2008).
  6. ^ Norman Abjorensen, "Australians Have Always Distrusted Banks", The Canberra Times, 8 March 1997 via factiva accessed 16 September 2011.