Story: Business failures and corporate fraud

Bank of New Zealand, Auckland

Bank of New Zealand, Auckland

In 1861 the young Aucklander Thomas Russell went into law partnership with Frederick Whitaker. The pair founded the Bank of New Zealand. The bank and its mortgage lender, the New Zealand Loan and Mercantile Agency, supported their investments, especially in confiscated Māori land, but the bank’s loose lending policies created difficulties in the long term. In 1894 it was in even worse trouble, and had to be rescued by the state. Whitaker was ruined and his son committed suicide over losses from land speculation following the 1886 crash. Russell just managed to avoid bankruptcy and narrowly escaped prosecution for fraud.

This is the Auckland Bank of New Zealand building in 2009.

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Te Ara - The Encyclopedia of New Zealand
Photograph by Jock Phillips

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How to cite this page:

Graeme Hunt, 'Business failures and corporate fraud - 19th-century business failures', Te Ara - the Encyclopedia of New Zealand, (accessed 12 August 2022)

Story by Graeme Hunt, published 11 Mar 2010