The Colonial Bank of New Zealand was a trading bank headquartered in Dunedin, New Zealand which operated independently for more than 20 years. A public company listed on the local stock exchanges it was owned and controlled by New Zealand entrepreneurs and not London or Australian bankers. Still subject to the same vicissitudes as its fellow colonial banks it was bought by the Bank of New Zealand in 1895.
| Company type | public listed company |
|---|---|
| Industry | Banking |
| Founded | July 1874 |
| Defunct | 1898 |
| Headquarters | Dunedin, New Zealand |
Key people | William Larnach Matthew Holmes William Tolmie Donald Reid[1] |
| Products | Banking, financial and saving services |
History
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Colonial Bank of New Zealand was established in Dunedin, New Zealand in April 1874 as a public listed company.[2][3] Dunedin with its involvements with the South Island's gold mining was the major source of local capital for New Zealand's entrepreneurs.
The Bank of New Zealand had been founded in October 1861 by a similar local group in Auckland and, to pull capital north, it had opened a branch in Dunedin in December 1861. The Colonial Bank of New Zealand may have been formed just to re-capture the Bank of New Zealand's South Island business.[4]
In the 1860s and 1870s capital was brought into New Zealand by the government and others. There was plenty of employment, development moved quickly and very good prospects brought property prices to high values.
In the 1880s prices of staple products fell very low, the rabbit pest cut wool production and the government cut expenditure on public works by 75 per cent. Land fell to half its former value and that was impossible to realise, many runholders and businessmen were ruined and the working classes were unable to purchase goods or pay their debts. There was no dairying or frozen meat industry. Investors withdrew their capital.[5]
The Colonial Bank had expanded to 27 branches and an office in London by 1889. Trading banks got into difficulties in both Australian and New Zealand at the end of the 1880s.[6][7]
There was a major financial slump in 1893 and negotiations began to amalgamate the Colonial Bank with the Bank of New Zealand. In 1895 the Bank of New Zealand took it over[8] then, finding itself in major difficulties, the Bank of New Zealand was obliged to let the Colonial Bank collapse in 1898.
William Larnach who had been one of the promoters[2] and owned a substantial shareholding bought more shares just prior to the collapse to show his confidence in its survival. Learning of the collapse he shut himself in one of parliament's committee rooms and shot himself dead.[9]
The business was liquidated by 1901 and the company dissolved in 1905.[10]
References
edit- ^ The Colonial Bank Otago Daily Times 1 October 1874 page 3
- ^ a b "A New Bank". Otago Daily Times. 27 April 1874. Archived from the original on 28 July 2019. Retrieved 27 August 2020 – via Papers Past.
- ^ "The Otago Daily Times". Otago Daily Times. 20 July 1874. Archived from the original on 28 July 2019. Retrieved 27 August 2020 – via Papers Past.
- ^ "History of Banking Operations in New Zealand". Manawatu Standard. 14 March 1944. Archived from the original on 28 July 2019. Retrieved 27 August 2020 – via Papers Past.
- ^ Banker Passes: William Watson Evening Post Issue 11 13 July 1938 page 13
- ^ "New Zealand in the world economy, 19th century". Archived from the original on 17 July 2013.
- ^ "Finance, transport and ownership, 19th and 20th centuries". Archived from the original on 22 July 2013.
- ^ The Liquidation of the Colonial Bank Otago Daily Times 28 December 1895 page 6
- ^ Suicide of Mar Larnach Otago Daily Times 13 October 1898 page 6
- ^ The Colonial Bank Otago Daily Times 3 May 1905 page 3
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