Balfour used his widespread non-conformist and temperance connections to raise funds, it became the largest building society in the country by the 1890s.
The Liberator Building Society was unable to meet the demand from withdrawals and in October 1892 a liquidator was appointed.
The Building Societies Gazette reported 30 cases of fraud between 1871 and 1891 but the collapse of the Liberator in 1892 was of an altogether different scale.
For the first few years, advances were made on small houses for owner occupation spread across southern England and Wales.
Amongst others, these included blocks of flats, hotels, land reclamation on the Isle of Wight, chemical works and collieries.
During 1892 rumours about the Liberator increased and questions were being asked which in turn led to heavy withdrawals from the society and two allied companies – London & General Bank and House and Land Investment Trust.
The directors stood by the asset valuations and claimed the society was still solvent and asked for time to effect a reconstruction.
[7] The shareholders duly held their own meeting to propose an alternative scheme of reconstruction, while recognising that the run on deposits made it difficult to provide funds necessary to complete the associate companies’ buildings.
The collapse led to the Building Societies Act 1874, which required tighter restriction on lending and greater disclosure.