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 The Bank of New South Wales (BNSW), also known as The Wales, was the first bank in Australia. It was established in 1817 in Sydney. During the 19th century, the bank opened branches throughout Australia and New Zealand, expanding into Oceania ...

. Brian Fitzpatrick, ''British Imperialism and Australia 17831833 : An economic history of Australasia'' (1939, London, George Allen & Unwin Ltd). The bank opened on 3 July 1826 in

George Street, Sydney George Street is a street in the Sydney central business district, central business district of Sydney. It was Sydney's original high street, and remains one of the busiest streets in the city centre. It connects a number of the city's most im ...

."On this day", ''The Daily Telegraph'', 3 July 2010, p 36 via factiva accessed 21 September 2011. The first directors of the bank were: Thomas Macvitie (managing director), Edward Wollstonecraft, John Macarthur, Richard Jones, Thomas Icely,

John Oxley John Joseph William Molesworth Oxley (1784 – 25 May 1828) was an English List of explorers, explorer and surveyor of Australia in the early period of British colonisation. He served as Surveyor General of New South Wales and is perhaps bes ...

, George Bunn, W.J. Browne, Hannibal Macarthur, James Norton, and A.B. Spark. Sydney James Butlin, ''Foundations of the Australian Monetary System'', (Sydney University Press, Sydney, 1968). It was dubbed the "pure merino" bank because its share register included the

plutocracy A plutocracy () or plutarchy is a society that is ruled or controlled by people of great wealth or income. The first known use of the term in English dates from 1631. Unlike most political systems, plutocracy is not rooted in any established ...

of the colony, but excluded the ex-convicts who had been associated with the Bank of New South Wales.Vic Carroll, "The old, old story: the rich get richer while the rest go under",

The Sydney Morning Herald ''The Sydney Morning Herald'' (''SMH'') is a daily Tabloid (newspaper format), tabloid newspaper published in Sydney, Australia, and owned by Nine Entertainment. Founded in 1831 as the ''Sydney Herald'', the ''Herald'' is the oldest continuous ...

, 22 May 1992, p 13 via factiva accessed 16 September 2011.

1828 bank theft

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).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).

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.Norman Abjorensen, "Australians Have Always Distrusted Banks",

The Canberra Times ''The Canberra Times'' is a daily newspaper in Canberra, Australia, which is published by Australian Community Media. It was founded in 1926, and has changed ownership and format several times. History ''The Canberra Times'' was launched in 1 ...

, 8 March 1997 via factiva accessed 16 September 2011. A number of leading colonial figures lost their fortunes, with many taking advantage of the ''Insolvent Debtors Act'' 1841.

References

{{Authority control History of Australia (1788–1850) Economic history of Australia Defunct banks of Australia Banks established in 1826 Banks disestablished in 1843 1843 disestablishments in Australia Australian companies established in 1826