The Colony of Victoria has sustained a great shook in
the suspension of the Commercial Bank of Au stralia, which stopped business on the 4th inst. The Bank had a nominal capital of £3,000,000, of which only £1,200,000 had been called up, leaving the holders of the three hundred thousand shares liable for Ai a share. The liabilities are estimated at £14,700,000, of which £12,000,000 are stated to be due to depositors, of whom one-half are in Great Britain. The Associated Banks of Melbourne made an effort to save the Bank ; but, on examination of its affairs, the negotiations failed, the Association demanding, it is asserted, all the liquid securities in the Bank as security for the necessary advance. That looks as if they distrusted the value of the real property in which the Bank had locked up its capital ; but at present, as usual, everybody is promised payment in full ; a scheme of reconstruction has been put forward under which, apparently, the depositors are to accept preference-shares in part payment ; and every- thing is ,so hopeful that one only wonders why the Bank suspended. The English of the whole matter seems to be that, during a mad " boom " in real property in Melbourne, the Bank made great advances on security only valid if the excessive prices were maintained. They were not maintained ; and now the Bank shareholders must either realise at a depreciation, or wait a few years till better times come round. The blow is a great one to investors, who had thought deposits at 4 per cent. in Australian Banks almost as safe as Consols.
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