With over 130 banking institutions operating in Australia during the nineteenth century, around 70 of these were represented in Melbourne. Establishing head offices in the city, not every institution calling themselves a bank during this time would meet our expectations of what a bank should be. Some were simply gold-buying agencies and others fronts for land speculation, quite a few did not accept deposits or conduct, by our standards, normal banking services. Many institutions were short-lived, and several saw their businesses halted due to fraud prosecutions and bankruptcies, with many name-changes, reconstructions and takeovers along the way.
Perhaps the first banking institution in Victoria was The Derwent Banking Company. Founded in Hobart Town, it specified that it conducted general banking business. Opening a Melbourne agency on the 8th February 1838 on the corner of Collins and Queen Streets, after experimenting with branch banking, it closed in 1849 after bad debts started accumulating on mortgage loans.
The Port Phillip Bank opened as The Melbourne and Port Phillip Bank in Jun 1839 Upon directors drawing excessively on bank funds, a shareholders’ meeting on 30th December 1842 resolved to wind up the business in February of 1843.
The Bank of Victoria, promoted by Henry ‘Money’ Miller opened in January of 1853, issuing notes, accepting deposits and conducting general banking business, although its activities were restricted to Victoria. After collapsing in May of 1893, it underwent reconstruction, reopening in Jun 1893.
Melbourne and Sydney branches of the London Chartered Bank of Australia opened on 1 July 1853. An Anglo-Australian bank formed in England by investors seeking to profit from Australian gold discoveries, the first Melbourne branch was located at 30 Collins Street East. Conducting general banking business, it established an extensive network of goldfields branches. Famously the Welcome Stranger nugget was taken to the local London Chartered Bank branch at Dunolly. Collapsing in 1893 and after undergoing reconstruction, it reopened in August of 1893 as The London Bank of Australia.
The Metropolitan Bank Ltd was formed out of the Melbourne-based Metropolitan Permanent Building and Investment Society and opened at 30 and 32 Collins street East in 1887 under management of R.G. Benson. Accepting deposits, offering current accounts, and advertising that it conducted ordinary banking business, the institution began to note issue on 22 Jan 1891. After being forced into voluntary liquidation in early 1892, after a run on deposits on 2nd December 1891, investigations later showed that directors had been borrowing from the bank to finance their personal share purchases.
The Caledonian Bank was established in 1888 by Melbourne engineer and land speculator David Munro and located at 231 Queen Street. However, after Munro began enlisting the bank to purchase his Brighton and Canterbury properties at inflated prices, shareholders protested in early 1889. Munro declared himself bankrupt and died a penniless alcoholic in 1898.