Fortunately for ES&A’s directors, the newly commercial city also needed a more structured stock market. ES&A was able to step in and sell the L-shaped section of land behind the new bank to the Melbourne Stock Exchange for £65,000. Through this transaction, they were able to recoup the costs of the new bank.
Side by side, the buildings represent the work of two of Australia’s foremost architects who played a key role in shaping Australia’s cities. William Wardell, who designed the Gothic Bank, also designed St Patrick’s Cathedral and Government House in Melbourne and St Mary’s Cathedral in Sydney.
William Pitt designed the Stock Exchange and a host of other iconic Melbourne buildings including the Oldersfleet buildings on Collins, the Melbourne Safety Deposit Building and the Bryant and May factory in Richmond.
Ironically, William Pitt and the Stock Exchange he designed are symbolic of the reversal of fortunes of the 1890s. As the Reserve Bank of Australia notes, the “over-extension of the property boom and its unravelling led to an abrupt collapse of private investment...and urban development and a sharp pullback in infrastructure investment.”
“A fall-off in capital inflow, adverse movements in terms of trade and drought accentuated the depression” according to the bank.
In an augur of the Global Financial Crisis of 2008, the property boom was “financed by rapid expansion in bank lending. In addition, many building societies and property finance companies sprang up,” the RBA wrote, with the increased competition “weakening prudential standards”.
The ensuring collapse in property prices led to “a spate of building society failures which spread to land banks. Public confidence in financial institutions faltered spreading the crisis to the institutions at the core of the financial system – banks that issued their own bank notes”.
Many banks closed permanently while others were later taken over by stronger banks. For its part, ES&A was also severely impacted by the depression in 1893.
Verdon was cristicised for his role, as his biography notes.
“Verdon's comments on various accounts suggest that he authorised some unwise advances,” it reads. “Although the bank's failure in 1893 was not his fault alone, he had allowed liquidity standards and coin and bullion ratios to fall.”