Profile of Shipping Investment
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SECTION THREE: Profile of Shipping Investment CHAPTER 6: THE PROFILE OF EARLY SHIP INVESTORS, 1810-1825 This section examines the occupational profile of shipping investors in NSW from 1810-1850, with the aim of identifying those participants, and their motivation for investment. To date, no comparable investigation appears to have been undertaken for NSW shipowners. Several studies, those of Sarah Palmer and R.G. Albion, of shipowners in London and New York respectively provide both templates and sources for comparing the pattern of ship investment in countries at different stages of development.1 Our early maritime history prompts a reminder that Australian development needs to be seen in its global context. While identifying some of the opportunities open to the local maritime industry, I argue that the nature of local shipping activity was qualitatively different from that of Great Britain, being more speculative or opportunistic in character. The business of ship ownership was so fraught with risk that it raises the dual questions of what motivated local investors to undertake such speculation, and who were these investors. I suggest that entrepreneurial activity, rather than investment in shipping per se provided social as well as business leverage. I will show that the pattern of ship investment among occupational groups in NSW differed in some remarkable aspects to that of London during the same period. There were some wild fluctuations in the numbers investing, in the total of shipping registered, and in the occupational groups investing in shipping. This section will also examine in closer detail the specific characteristics of the major investors, mariners and merchants, the opportunities that made investment shipping attractive and the dynamics of that investment. The fluctuations evident in local shipping investment reflect a greater sensitivity to market opportunities and risks. This, I suggest, reflects the speculative nature of shipping activity in NSW. 1 S.R. Palmer, ‘Investors in London Shipping, 1820-1850’, Maritime History, Vol. 2, 1972, pp.47-68; R.G. Albion, ‘Early Nineteenth Century Ship-Owning, A Chapter in Business Enterprise’, Journal of Economic History Vol. 1, 1941, pp.1-11. 130 On a general level, Henry Davidson, testifying to the Select Committee on the Navigation Laws in 1848, provided one clue to the vexing question of motivation.2 Davidson had previously been a large shipowner in London, a West Indian plantation owner and an importer from the West Indies. He informed the Committee that “Regularity, Certainty and Convenience were the great Advantages” that ship ownership provided plantation owners during a period when the sugar trade from the West Indies had been assured.3 It was, he said, “A Matter of Convenience” for the owners of estates there.4 Another London shipowner in the West Indian trade, John Alexander Hankey confirmed this rationale, saying that he was a shipowner because he was a merchant.5 To such men as Davidson and Hankey then, ship ownership was merely ancillary to their main occupation as plantation owner and merchant. Ship ownership was not an essential corollary of either profession per se, but in fact represented an additional business risk. For both, investment in shipping was a diversification strategy determined by West India’s geographical isolation from London markets and British Navigation Laws that prevented them from utilising American ships. Australian historians of the early colonial period would be very familiar with the rationale of Davidson’s sentiments with respect to the early development of the NSW shipbuilding and ownership. Practical necessity ensured that from the very beginnings of settlement, NSW colonial governors were required to overlook their rigorous instructions forbidding ship construction in order to overcome isolation and ensure food supplies. Supply ships visiting from Great Britain were irregular, inadequate and infrequent. In a developed economy, such as that of Great Britain, merchants and landowners could normally expect to secure cargo space for their imports and exports from among available shipping, or alternately charter a vessel. In NSW, however, a 2 British Parliamentary Papers, First Report from the Select Committee of the House of Lords appointed to inquire into the Policy and Operation of the Navigation Laws and to report thereon to the House; together with Minutes of Evidence taken from 9 March –5 May 1848. Ordered by the House of Commons to be printed 19 May 1848. (Trade and Industry: Navigation Laws), Vol..2, p. 70, (hereafter referred to as BPP (1848). 3 Testimony of Henry Davidson, ibid, 16 March 1848, Question 752, p.70. 4 Ibid, Question 755, p. 70. 5 Hankey was a proprietor of the merchant firm of Thomson, Hankey & Co. of London, plantation owner, and Chairman of the East and West India Dock Company in 1847. Testimony of John Alexander Hankey, dated 17 March 1848, ibid. p. 91. 131 shortage of available shipping, regulations and distance, and local opportunities, promoted local shipping investment by merchants, landowners and mariners. There is much evidence of a link between land occupation and ship ownership in the early years of NSW.6 Local topography and soil quality contributed to the pattern of shipbuilding and ownership, with the exploitation of fertile land on the Parramatta and Hawkesbury Rivers providing Sydney’s food basket. Hainsworth and Jan Barkley have commented on the relationship between ship ownership and farming settlement on the Hawkesbury River for the transport of essential food supplies to Sydney.7 After 1801, the coal, lime and cedar resources in the Hunter and Shoalhaven River regions provided new and lucrative activity for shipping investors. The Great Dividing Range created both a barrier and watershed that continued to influence the pattern of settlement and land use.8 The eastern river systems provided access to large native forest timbers and fertile lands within the colony’s coastal fringe. The demand for local shipping was closely associated with this settlement and land use. Nevertheless, even within the first fifteen years of settlement, investment in shipping was also closely linked with a desire to exploit maritime resources, including the seal colonies, flax, and sandalwood and bay whaling. Ralph Davis and Sarah Palmer observed how few British shipowners identified their primary occupations directly as shipowners.9 Rather, they more frequently identified as merchants, mariners, shipwrights or other miscellaneous occupations. This appears to be at odds with Ralph Davis’ assertion that ship ownership conferred status, and the means for entry into the middle class.10 While London merchants clearly did not 6 An examination of very early nineteenth century shipping activity reveals that many investors, for example Andrew Thompson, were landowners whose vessels were extensively employed in the carriage of grain from the Hawkesbury to Sydney. See J.S. Cumpston, Shipping Arrivals and Departures Sydney, 1788-1825, 1963, pp. 44-6; J.V. Byrnes, ‘Andrew Thompson 1773-1810’, Parts I & II, Royal Australian Historical Society Journal, Vol. 48, Parts II & III, 1962. 7 D.R. Hainsworth, The Sydney Traders: Simeon Lord and His Contemporaries 1788-1821. Sydney 1981, pp. 115, 116, 118, 122; Jan Barkley & Michelle Nichols, Hawkesbury 1794-1994.The First 200 Years of the Second Colonisation, Hawkesbury City Council, Windsor, 1994. 8 D.N. Jeans, ‘Shipbuilding in Nineteenth Century New South Wales’, Journal of the Royal Australian Historical Society, September 1974, Vol. 60, Part 3, p. 160. 9 Ralph Davis, The Rise of the English Shipping Industry in the Seventeenth and Eighteenth Centuries. Macmillan & Co., London 1962, p.81; Palmer, op. cit..,pp. 55-6. 10 Davis, (within the context of master mariners), ibid, p.84. 132 require any additional symbols of status, other occupational groups, I suggest, would have welcomed the opportunity to advertise their status as shipowners if Davis’ premise is correct. Palmer’s own statistical analysis of the occupational profile of shipowners (discussed in this chapter) appears to contradict Davis’s assertion.11 A similar analysis of the occupational profile of NSW shipowners, I suggest, shows even less evidence that they were motivated by a pursuit of social status. Nevertheless, given Davis’ assertion, it is important to understand its context and implications. A number of witnesses testifying before the British House of Commons Select Committees on the causes of shipwrecks in 1836 and 1843, as well as during the inquiries into the British navigation laws, made observations on shipowners that give some validity to Davis’ point. In 1836 Henry Woodruffe, a British shipbuilder, owner and ex-ship commander, stated that, “it is a point of great honour among tradesmen to have ships; that it is a principal point they wish to attain to”.12 According to Woodruffe’s definition, “tradesmen” included any “man who is a shopkeeper, or grocer, or a shoemaker, or such like”.13 He confirmed that ship ownership conferred status, and provided an avenue for social advancement, stating “The tradesman, by having this ship, increases his respectability, that being a kind of fly-wheel to his business,” and that often three or four tradesmen would band together to purchase a ship.14 Woodruffe’s own career commenced as a lad in the forecastle of a merchant ship, from which he was impressed into the Royal Navy. Despite his status as shipowner, he maintained empathy with mariners, whose safety he considered endangered by the emerging tendency of tradesmen unconnected with the industry to become primary shipping investors. This new type of investor, being ignorant of the shipping trade, frequently made poor management decisions – from appointing unskilled or unfit 11 Palmer, op.cit., Table IV, p. 54. 12 3 July 1836, British Parliamentary Papers, House of Commons: Report from the Select Committee appointed to inquire into the Causes of Shipwrecks with the Minutes of Evidence, Appendix and Index. Sessional papers (Shipping Safety 2), First Report, 1836, Shannon, Ireland,1970.