Thursday, 14 January 2016

Early banks in Hobart

As the new settlement developed and grew, especially with a growing number of free settlers, it became necessary to establish a banking system in the colony. The Bank of New South Wales had been established in Sydney in 1817 but this was not particularly useful for those living in Hobart Town.

The Bank of Van Diemen's Land was established on 11 August 1823 and opened Monday 15 March 1824. This was Tasmania's first bank and the second bank established in Australia. The bank was initially located in Macquarie Street. Articles in Trove for 1823 provide information about the formation of the bank. The bank failed in the depression of 1891. At that time the bank was located in an impressive building on the corner of Collins Street and Elizabeth Street.
Bank of Van Diemen's Land Macquarie Street 1834 [LINC]
In the An Account of the Colony of Van Diemen's Land (1830) an anonymous writer provides thoughts on the colony. An excerpt from this work has been included in Old Hobart Town and Environs 1802-1855 by Carolyn R Stone and Pamela Tyson (1978).  The observations about banks begin on page 92.
There are two public, and one private Bank in Hobart Town, and one public one in Launceston. I shall now speak of the former. The Van Diemen's Land, or Old Bank, as it is sometimes called, was founded in 1823, and is a joint Stock Company, with a limited number of shares, of £50 each,on which only £31, 5s. has been as yet called for. The affairs are conducted by a president and six directors, two of whom go out yearly in rotation; a cashier and principal and assistant accountant. Ten per cent. per annum is the rate of discount on good bills, but gives no interest upon them. The half yearly dividend has never been less than 8 per cent, on the amount paid upon each share.
The Derwent Bank was established in 1827 and opened for business on 1 January 1828 in Davey Street, Hobart Town. The Convict Savings Bank was initially attached to the Derwent Bank to encourage convicts to save money to improve their life. In 1846 a new bank building was erected at 132 Macquarie Street. This building now houses the Tasmanian Club. The bank failed in 1849.
Derwent Bank in Davey Street 1834 [LINC]
Anonymous also made observations about the Derwent Bank:
The Derwent Bank was established in 1827, principally by the Government officers. Its shares are £100 each; and it is conducted nearly on the same principles, and by the same number of officers as the old bank. Shortly after its establishment, the Government Officers were obliged to withdraw, in obedience to an order of Government. This was caused by the complaints that were made of the undue preponderance obtained by this bank, in consequence of its close connection with the members of Government.  The paper of these two banks is received as a legal tender in all payments into the Government coffers. A change has lately taken place in the management of the Derwent Bank...
The third bank mentioned by Anonymous was the Commercial Bank.
Commercial Bank Macquarie Street 1834 [LINC]
The Commercial Bank was established in June 1829 by John Dunn and moved to the location shown in the image in January 1831. The building was rebuilt in 1864-1866 and is currently occupied by Heritage Tasmania. The bank was purchased in 1921 by the English, Scottish and Australian Bank Limited (ES&A). During the existence of the Commercial Bank it was controlled by the Dunn family and then the Barclay family. The comments about the Commercial Bank made by the anonymous writer are as follows:
The Commercial Bank is a private undertaking by the sole proprietor, Mr John Dunn, who was formerly a shopkeeper in Hobart Town, and realized a good deal of money by his dealings. It was established in 1829, and, like the other banks, issues its paper, which is, however, not received by the Government. Those who keep accounts in this bank can discount every day, but strangers only on Wednesdays and Saturdays. Ten per cent. per annum interest is allowed for money deposited more than six months. A good deal of business is done by this bank, which has, in a great measure, been caused by the public ones refusing to receive its paper in any shape; thereby assisting to keep it in circulation, and forcing in their own. This was found to be so much the case, that they have lately come to a resolution to receive the Commercial banknotes to a limited amount. ...
As noted above the banks issued their own notes:
Bank note from Derwent Bank 1838 [LINC]
The Companion to Tasmanian History has an article on Banking and Finance in the state.

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