Business and economic prospects deteriorated dramatically between the mid-1920s and the mid-1930s. After the slump of 1929, few phases of market development have been so weighed down with negative factors: labour unrest, profound monetary disturbance, and a worldwide depression in production and prices created a prolonged crisis of confidence in trade. The world of international banking was neither immune to the crisis nor well placed in dealing with its consequences. British overseas banking certainly suffered. The Anglo-South American Bank, for example, was close to collapse in 1931, was then rescued by inter-bank co-operation and was eventually sold to the Bank of London and South America; the Anglo-International Bank was severely battered in 1931 and was quietly put into liquidation in 1933.1

The Mercantile's career in the 1920s and 19 30s, through all these adversities, showed endurance and enterprise. Total assets continued to build up during the mid-1920s, reaching nearly £19 million in 1928. The Depression briefly reduced the balance sheet total to only £14.7 million in 1931 and, in common with banks throughout the overseas sector, the Mercantile cut its dividend. From 1931 the dividend on all classes of shares was reduced from 16 to 12 per cent and these rates were maintained for the rest of the decade. The bank's total assets soon recovered, however, and by 1935 the balance sheet total had reached £17 million.