WOOL AND THE NEW SOUTH WALES ECONOMY

BEFORE 1851

G. J. Abbott

Degree: Doctor of Philosophy-

Date of Submission: April 1969 TABLE OF CONTENTS

Chapter Page I. INTRODUCTION ...... 2

PART I. WOOL AND THE GAOL ECONOMY

II. SHEEP FARMING IN NEW SOUTH WALES, 1788-1821...... 23

PART II. THE PASTORAL ECONOMY, 1822-1851

III. THE WOOL INDUSTRY, 1822-51: A SURVEY...... 73

IV. THE SHEEP FARMING TECHNOLOGY...... 128

V. SHEEP FARMING: COSTS AND RETURNS...... 162

VI. SHEEP FARMING AND THE GOVERNMENT...... 188

PART III. WOOL AND THE NEW SOUTH WALES ECONOMY BEFORE 1851.

VII. WOOL AND THE NEW SOUTH WALES ECONOMY BEFORE 1851 ...... 307

BIBLIOGRAPHY 330 LIST OF TABLES

Table Page

1. The Number of Sheep in New South Wales: 1794-1810 ...... 33

2. Commissariat Purchases of Fresh Meat in New South Wales: 1811-19...... 51

3. Wool Shipped from New South Wales: 1807-21...... 56

4. Prices Obtained at London Auctions of New South Wales Wool: 1818-21...... 60

5. Prices Received at London Auctions by H. Macarthur: 1821-25 . 78

6. The Marketing of New South Wales Wool...... 82

7. 'Official' Wool Prices: 1827-50 ...... 93

8. Land Revenue and Expenditure on Immigration in New South Wales: 1832-5 ...... 226

9. Average Price per Acre Obtained at Government Land Auctions in New South Wales: 1838-40 ...... 253

LIST OF ILLUSTRATIONS

Figure Page

1. Number of Sheep in New South Wales: 1800-21 ...... 66

2. Number of Sheep and Wool Exports: New South Wales, 1821-51...... 126

3. New South Wales: The Settled Areas, 1825...... 197

4. New South Wales: The Nineteen Counties...... 203

5. The Number of Assisted Immigrants Arriving in New South Wales: 1832-50...... 242

6. 'Sketch Showing the Squatting Districts in New South Wales: 1844'...... 257

7. 'Ways and Means for 1845'...... 270

8. 'Raising the Wind....'...... 271

9. 'Don Quixote's Remarkable Adventure....' ...... 272

10. Value of New South Wales Wool Exports:1826-51...... 326 ABBREVIATIONS

BAH ...... Business Archives and History

HRA...... Historical Records of Australia

HRNSW...... Historical Records of New South Wales

JRAHS ...... Journal of the Royal Australian Historical Society SUMMARY

Despite the importance accorded to the wool-growing industry as the most crucial formative influence on the growth of New South Wales during the eighteen twenties, thirties and forties, few attempts have been made to trace the history of this industry from its inception till the begin­ ning of the gold era in 1851, and these attempts were made many years ago.

Much of historians' thinking about the role of wool in the New South Wales economy before 1851 is conditioned by a romantic tradition initially established in works such as Bonwick's Romance of the Wool Trade and Collier'

The Pastoral Age in Australasia - both of which were published over fifty years ago - and continued in S. H. Roberts' books. The inadequacies of certain aspects of this interpretation have been shown in recent years, yet no attempt has been made to fully re-examine the material on which these previous histories have been based.

A close examination of their sources (books and pamphlets about New

South Wales written in the eighteen twenties, thirties and forties; govern­ ment reports of the same period; and manuscript material) and of new sources reveals a very different story. As is shown in Part I of this study, the origin and development of the wool industry before 1821 - in the period when

New South Wales' primary economic function was regarded as that of a self- sufficient gaol - depended less on actions of men with heroic visions and more on simple market opportunities. Part II seeks to show that the devel­ opment of the wool industry in that phase of New South Wales growth often Summary, cont'd described as the 'pastoral age', was less of an unqualified success story than the traditional account suggests; that profits stemmed less from wool sales than from sales of surplus livestock, and that the technology of sheep-farming was designed to take advantage of this profit situation.

Understanding this it is easier to explain the shape of the local govern­ ment policies and legislation concerning land and immigration during the three decades preceding 1851. But this does not mean that the growth of the wool industry was of minor consequence in this period, rather that the exaggerated claims of the romantic tradition should be discounted and that the process of growth in the New South Wales economy should be recog­ nized as being more complex than a simple reference to a central role for wool suggests. INTRODUCTION 2

CHAPTER I *lt* vv

ir~ Kensington e\ INTRODUCTION \ V

In his book The Three Colonies of Australia which was first published Use ear^ in ^1850s, Samuel Sidney divided the history of New South Wales previous to 1851 into two stages: the first, when it was 'a mere gaol or sink in which surplus felonry was poured'; the second when it was a 'sheep- walk'^. He was, in the use of this division, the precursor of modern historians who have depicted the progress of New South Wales in the period 1788-1851 as the transformation of a society bound by penal regulations into a society with free institutions and of an economy dependent on the British government's expenditure on its prison into a viable economy based on wool production. The statement, 'wool made 2 Australia a solvent nation^, and, in the end,a free one' epitomizes this approach and indicates the nature of the changes discerned by historians when examining this period, and the role they have ascribed to wool in this metamorphose.

In spite of the importance attributed to wool, few studies have been made of the history of the wool-growing industry from the time of its origins till the discovery of gold in eastern Australia in 1851 introduced a novel element into the Australian development process.

^ *?lf 'Pires* Colon e ~f S idney, /ap—♦ , p. 11. Throughout this study New South Wales will be used to denote the mainland area of the colony as it was before the separation of Victoria in 1851. 2 W. K. Hancock, Australia, (Sydney, 1945), p. 12. See also A. Barnard, The Australian Wool Market, 1840-1900, (Melbourne, 1958), p. xv. 3

There are some studies which purport to do so but they were written many years ago since when new data has rendered many of their findings suspect. More recently studies of the wool-growing industry covering various parts of the 1788-1831 period have been made, but differences in the approaches adopted mean that they cannot be simply strung together to form a consistent and coherent account of the history of wool-growing in New South Wales before 1851.

The major contribution to the history of the pre-1851 development of the wool industry is to be found in the work of S. H. Roberts; in particular in his books, History of Australian Land Settlement, which was published in 1924, and The Squatting Age in Australia: 1835-1847,

, 3 which was first published in 1935. In the preface to the former book

Roberts explained:

The final product is far different from my original plans. As far back as my memory goes, nothing has ever gripped me more than the romance of Australia's squatters--the conquest of an unknown land by a body of adventurers, who spread over hundreds of miles, and who occupied principalities in the face of Government, the natives, and all manner of natural diffi­ culties. I set out with the intention of explaining that ^ period and showing how it really sums up Australia's story.

It was undoubtedly with this intention that Roberts wrote the second book,

The Squatting Age, for it is permeated by this theme of the romance of squatting.

This book was reprinted with corrections by Melbourne University Press in 1964. 4 S. H. Roberts, History of Australian Land Settlement, (Melbourne, 1924), p. xiii. 4

In this respect Robert's work represents a continuation of a

tradition established in two earlier books--James Bonwick's Romance of the Wool Trade, published in 1887, and James Collier's The Pastoral

Age in Australasia, published in 1911. The tenor of Bonwick's work

is shown in his opening sentence, 'Romance, though sometimes associated with the wild and improbable, is often but a tender suggestion of the poetical and wonderful''? It was this latter quality which Bonwick saw exemplified in squatting, which he described as a 'vagrant life of hardship' proving the mettle of the men who pushed into the interior of the continent with their flocks. His account of the wool-growing

industry in New South Wales is therefore cast in an heroic mould, providing descriptions of the work of 'Captain Macarthur, Founder of

Australian Squatting', of the Reverend Samuel Marsden and of a vast conglomerate of persons he loosely labelled squatters. But Bonwick equated squatting with the movement of flocks outwards from the Sydney

Plain and made no distinction between the depasturing of sheep on purchased or granted land outside the Sydney Plain and depasturing

them on crown land by simple occupancy. Squatting, in terms of

Bonwick's description, was the geographic expansion of the wool­ growing industry and to the degree that he failed to differentiate between the types of land occupation involved in wool production, he exaggerated the importance of squatting. Such a distortion is under­

standable and inevitable, for Bonwick was not seeking to analyze, but

^J. Bonwick, Romance of the Wool Trade, (London, 1887), p. 1. 5 <4c3cr*\tc. to^'sympathetica lly ^UstgBS^Sk. a 'poetical and wonderful' aspect of

Australian experience.

The squatter and squatting were also romanticized in Collier's book;

'Australian history has no more picturesque figure' he wrote, 'than that

of the pioneer squatter. Rarely a native, almost always a gentleman

immigrant, often a man of education and culture, . . . merry-hearted £ and of undaunted courage'. While some of the early squatters deserved

such an epitaph, Collier's explicit and implicit suggestions that the

pioneer squatters were of unblemished character and possessed of un­

doubted moral integrity scarcely accord with descriptions of their behaviour found in many books written in the late 1830s and in the 1840s.

Collier's depiction of the wool-growing industry shows the squatters as knights-errant saving the colony from the government dragon; a

romantic depiction, 'poetical and wonderful', but also somewhat 'wild and improbable' in many respects.

Roberts chose to continue this romantic tradition; his attachment

to the romantic approach' of Bonwick and Collier can be particularly

illustrated by his choice of 1835 as the beginning of the 'squatting age', a choice which he justified in the opening paragraph of his The

Squatting Age in Australia. There he wrote:

It is not unusual in the history of organisms for the protoplasm to remain in a state of retarded development

. Collier, The Pastoral Age in Australasia, (London, 1911), p. 77 6

--almost quiescence--for some considerable time and then suddenly to commence growth at practically a forced rate, as if to make up for the delay previously experienced. So it was with the early history of Australia--so much so that the observer may point to a single year and say that then commenced the real story of Australia's progress. This point, when the graph suddenly took its upward curve, was the period 1835--when the protoplasm bega^ to indicate what form of organism it was developing into.

Elsewhere in his book Roberts stated that squatting was 'already g enjoying a lusty life by 1835', though in his earlier book he had 9 suggested at one point that 1835 was the year when squatting started .

But an examination of quantitative data does not suggest that any particular significance can be given to 1835. The production of wool (as reflected in export figures) showed no change in, or from, that year such as to validate a suggestion that 1835 marked an inflexion point in the growth of the wool-growing industry, nor does the behaviour of indicators such as the value of imports and exports, or the number of immigrants arriving suggest that 1835 marked a new phase in the process of the economic growth of New South Walesf^

Admittedly, there are references in contemporary publications to the arrival during the second half of the 1830s of many young men wishing to establish themselves as squatters, but there is nothing to indicate that this inflow began in 1835 nor that its increase after 1835 was sufficiently large to justify any particular significance being given

7S. H. Roberts, The Squatting Age in Australia, (Melbourne, 1964) p. 1.

8Ibid., p. 52 9 In his History of Australian Land Settlement (p. 28a), Roberts shows on one map "Land alienated in 1835 - to show position when squatting started."

^See S. J. Butlin, Foundations of the Australian Monetary System, (Melbourne, 1953), p. 225 n. 7 to that year.

The protoplasm analogy used by Roberts to support the choice of

'the period 1835' as a turning-point in Australian history seems to be an embellished form of Collier's contention that the legalization of squatting represented 'the true germinal protoplasm of the British colonies at the Antipodes'^ Collier does not give a specific date for this change, though his discussion makes it obvious that he was referring in particular to the 1836 Act (7 Wm. No. 4) of the New South

Wales Legislative Council, which arose from certain discussions in 1835, hence, apparently, Roberts' choice of 1835. The 1836 Act, which Collier claimed meant that 'squatting was legalised and regularised, . . .

/gave? an impetus to free colonisation, . . . lifted the community to 12 a higher plane, and started it on a new career.' He argued that the

'compact and organized industrial system, with a convict base, and the 13 reformation of the convicts for its existence' initially established in New South Wales was such that 'the lines the British Government 14 designed for the colony were not of Nature's drawing' but that the government obstinately maintained them even when their inappropriateness had become clear. Eventually the local representatives of the Crown came to recognize the benefits which were to be derived from development

"^Collier, op. cit. , pp. 4-5. 12 Ibid., p. 4. According to a recent commentator, Peter Burroughs, The 1836 Act 'simply extended the system of annual pastoral licences that had already been operating satisfactorily . . . since 1827 . . .'. (Britain and Australia, pp. 150-1). 13 Ibid., p. 2. 14 Ibid., p. 5. 8

'of Nature's drawing' and their representations 'to that effect to the authorities in England . . . succeeded in persuading them of the justice 15 of their views'. This, Collier suggested, led to the legalization of squatting which represented the ending of the legal framework of the unnatural convict 'industrial system', replacing it by 'a right design 16 that was of Nature's devising.'

Collier exaggerated to an inordinate degree the significance of the

1836 Act which can in no way be regarded as reflecting a changed attitude on the part of the imperial government or even of the local legislature towards the basic function of New South Wales. While

Roberts did not specifically justify his choice of 1835 by reference to any political changes it would appear that he had in mind Collier's argument when attaching such significance to 1835. Other aspects of

Robert's work can also be seen to represent a continuation of themes originally developed by Bonwick and Collier: in particular, the romanticization of squatting and the emphasis on the genesis of wool­ growing in New South Wales in the early years of the nineteenth century and on the squatting exodus of the period 1820-50. In all of these three author*s‘ work^the stress on the romance of squatting precluded a critical and objective examination of many of its aspects, while their failure to show the developments between the genesis and exodus phases gave an unwarranted dramatic quality to the history of the wool

^Ibid., p. 4.

16Ibid. , p. 5. 9 industry. The deficiencies of Roberts' work have been subsequently shown in studies of certain of the political aspects of squatting to such an extent that when Roberts' book The Squatting Age was recently republished, one reviewer applied to it the description, 'an exquisitely conceived and executed romance rather loosely or remotely based upon history.'^ This criticism could be equally applied to the works of Bonwick and Collier, yet the works of these romanicists constitute the major published attempts to trace the history of wool­ growing in New South Wales from its origins till 1851.

Studies published during the last few years have concentrated on an examination of the early history of the wool industry in New

South Wales. The first, Miss Ker's study, "The Wool Industry in New 18 South Wales 1803-1830," was published in 1961-2. Certain claims made in this article were referred to by J. W. McCarty in his article 19 "The Staple Approach in Australian Economic History" published in 1964, and this in turn led E. G. Beever to offer an alternative interpretation in an article, "The Origin of the Wool Industry in New South Wales" published in 1965?^

Miss Ker delineated four phases in the early history of the New

South Wales wool industry. The first, 1803-13, began when Captain

John Macarthur clearly discerned the potential market in Britain for

■^D. W. Baker, "The Squatting Age in Australia", BAH, Vol. V, no. 2, August 1965, p. 122. 18 The study was published in two parts, the first in the Bulletin of the Business Archives Council of Australia, Vol. 1, no. 9 (n.d.), pp. 25-49, and the second in BAH, Vol. II, no. 1, February 1962, pp. 18-54,

^BAH, Vol. IV, no. 1, February 1964, pp. 1-22. 20 BAH, Vol. V, no. 2, August 1965, pp. 91-106. 10

fine wool (i.e. merino wool) and advanced claims concerning the capacity of New South Wales to produce such wool. Macarthur returned to New

South Wales in 1805 inspired by a 'vision' and actively sought to promote the growing of fine wool for export, but too few were similarly imbued so that the decade following 1803 was 'one of a relatively static

situation', characterized by 'an accumulation of experience without 21 purposive direction'. The unsuitability of the size of land grants and of the labour force; the insecurity of property within the penal settlement; the general lack of knowledge;and experience of sheep­ farming; the lack of any market for the products of sheep except meat; the shortage of improved strains for breeding; and settlers' general inclination to simply seek to re-create in New South Wales the agricultural 22 system they had known in England , when compounded had the effect of minimizing local interest in the production of wool for export during the decade 1803-13 in Miss Ker's opinion.

Some wool sent to England in 1812 was sold for remunerative prices and this success enthused local sheep-owners. There was now an incentive, but pastoralists could not expand wool production sufficiently ■Sully to AMMfP exploit /the opportunities in the British market because

Governor Macquarie, failing 'to perceive the economic possibilities of wool-growing', restricted the movement of livestock to the pastures

21 Ker, ££. cit♦, Part I, p. 35 22 Miss Ker derives this questionable claim by implication from the average size of farms, the nature of the capital equipment found on these farms and their mixed cropping practices. 11 made available by the crossing of the Blue Mountains in 1813.

Macquarie's restrictions were removed in 1820 as a result of

Commissioner Biggeb representations, the product of an unbiased perception of the importance of wool-growing for the colony, and their removal marked the beginning of the third phase: a five-year period of 'booming pastoral expansion'. By 1825, the end of this third phase, according to Miss Ker 'the worst of the pioneering was over': pastoralists now had good breeding stock, good land and an efficient marketing system available to them. The future progress of the wool industry was to be in terms of the application of the f experience of the pioneering days: in the decade after 1825 (i.e. in the fourth phase) the industry's growth was determined by 'seasons, disease and the fluctuations of the wool market in Great Britain and and the Continent.'

In his article suggesting the relevance of Staple Theory to the analysis of Australian economic development, McCarty refers to two questions suggested by Miss Ker's work, 'Why was it not until 1812 that the first commercial shipment /of wool7 was undertaken?' 'And why after the success of this shipment did wool exports remain a

2^ dljrtvnfj trickle until after 1821?' He Aioouooe-g Miss Ker's explanation of the slowness of the development of wool production for export in the period 1803-13 by contending, 'as far as the rise of wool exports is

23 J. W. McCarty, ££. cit., p. 16. 12 concerned it is the situation of the exceptional rather than of the average grazier that will determine when the innovation will occur and Macarthur, Marsden and Riley had the technical skill and means, 24 and incentive of high wool prices by 1804.' What they lacked,

McCarty claims, was 'capital and commercial purpose:' capital for 'investment in sheep, fencing and shepherding, and a foregoing of income while the wool was grown and sent on its long journey to 25 England.' Then the depression which affected New South Wales during the first half of Macquarie's administration forced pastoralists

who had hitherto dabbled speculatively in commerce to withdraw from

it and specialize in pastoral pursuits thus releasing 'the necessary 2 6 capital and enterprise for the development of wool production.'

Beever suggested that Miss Ker's and McCarty's explanations share

two serious weaknesses: they understate the length of the delay be­

tween 'technical achievement in 1804' and the establishment of the nih>cje oi wool trade; and they 'overstate^the task of setting up this new 27 industry.' Beever contended that 'until the end of the 1820s the

wool trade developed in no more than a nominal sense and that its

establishment as Australia's export staple, as distinct from an in­

cidental source of pastoral income, occurred between the late 1820s and

Ibid 2^Ibid, p. 17

^ibid, p. 18 27 Beever, 0£. cit., p. 92 28 L J mid-1830s.' This delay, he explains as a manifestation of settlers' unwillingness ft* seriously consider wool production while ever profits on meat production were higher. Unfortunately however in the presentation of his basic thesis Beever makes a number of errors in quoting prices, e.g. the prices he cites as being paid for beef and mutton by the government store in 1801 are the prices then existing in the private market, which as the governor's attempts to fix prices show# 29 was a monopolistic market. Furthermore, Beever wrongly contends that the government store was purchasing fresh meat before 1808: in fact no such purchases were made and the ready market for meat he imagines existed hardly accords with the constant references to its 30 monopolistic domination by a few settlers during this period.

All three of these studies suffer from a common defect in that they make no attempt to establish the actual volume of exports during the period 1812-21. As will be shown later the volume of these exports was far greater than that shown in the official statistics referred to in these studies, and the amount of wool produced and sent from the colony during this period can hardly justify discussion of a lengthy delay. A second deficiency evident in all three studies is their failure to take cognizance of the number of statements which

no Ibid, p. 92 29 See HRNSW iv, p. 466 for the 1801 prices. See also HRNSW vi, pp. 288, 294; vii, p. 325. 30 See G. J. Abbott and N. B. Nairn, Economic Growth of Australia,

(Melbourne, 1969) pp. 24-3-4 14 appeared around 1820 concerning the then-recent increase in 31 interest in breeding merinos for fine wool production, while their most fundamental fault lies in their failure to recognize the fundamental reason for the development of exports in a new colony.

Innis, one of the original formulators of what has become known as the Staple Theory, claimed that any settler in a new colony wishing 'to maintain the same standard of living as that to which he has been accustomed. . . had to rely on goods which are obtainable from the mother country,' which meant that com­ modities had to be 'produced as rapidly as possible /in the colony/ to be sold at the most advantageous price in the home market in order to purchase other goods essential to the maintenance and improvement 32 of the current standard of living.' While the universal applic- 33 ability of this theorem might be queried, Innis' observation would seem to be particularly appropriate in the case of New South Wales.

Its founders' tastes had originally led many of them into criminal activity and while it had been hoped that placing them in a new environment would lead to their reformation, their transportation to

31 e.g. See W. C. Wentworth, A Statistical, Historical and Political Description of New South Wales, (London, 1820) p. 146. 32 H. Innis, The Fur Trade in Canada, (Revised Edition, Toronto, 1964) p. 384. 33 R. E. Baldwin in his article "Patterns of Development in Newly Settled Regions" (The Manchester School of Economic and Social Studies, vol. xxiv, no. 2, May 1956, pp. 161-79) relates the propensity to import to the character of the technology prevailing in the new colony. 15 to^antipodeaaa t*liup.’u did little to assuage their thirst or taste for

English commodities. Similarly, those responsible for the garrisoning of the colony and guarding of its convict inhabitants were desirous of maintaining the standards of consumption befitting an officer and a gentleman and this required the ready procuring of imported merchandise.

From its beginning there was in New South Wales a high propensity to import, but whereas according to Innis’ contention this would induce the growth of an export-producing industry, in the case of New South

Wales this import-propensity impetus for exports was initially negated and later dampened by the availability of foreign exchange in the form of bills drawn on the Treasury in London (usually referred to as

Treasury Bills). These Treasury Bills represented, in the main, governmental payments for locally produced foodstuffs purchased for issu­ ing to the convicts, military personnel and free persons receiving rations from the Commissariat Store. While ever the amount of

Treasury Bills generated by this purchasing system was sufficient to meet the cost of the imports arriving in New South Wales there was no inducement for an export industry to develop: when the amount of

Treasury Bills drawn in a given year fell short of the amount of local indebtedness to overseas suppliers for imports which had been received 34 or were being received, there was an inducement for the development of export production. Since wool was primarily or virtually only

Before about 1804 imports flowed to the colony mainly in the form of cargoes speculatively brought and were paid for on the spot. After this date there gradually developed a system whereby goods were consigned to the col­ ony's merchants by overseas suppliers, who extended credit to the former. This involved a growth in the debt owed overseas. If in a given year overseas suppliers consigned a volume of imports significantly larger than the volume of foreign exchange (i.e. Treasury Bills) becoming available or if they pressed local merchants to contract their indebtedness, there was then an increase in the pressure for exports. 16 considered as an export, to understand the process of development of the wool-growing industry in New South Wales, it is essential that this basic premise concerning the relation between imports and exports be taken into 35 consideration. Neither Ker, McCarty nor Beever ever refer to this basic notion, yet there were repeated references made by the colony's various governors and its inhabitants, and even statements by Commissioner

Bigge concerning the desirability of developing export production to enable the colony to pay for its imports.

Considering the importance historians have attached to the wool industry as a determinant of the pattern of development in New South Wales before 1851, it is surprising that so little attention has been paid to its history. Sufficient indication has been made of the deficiencies in existing studies to show the need for a coherent account of the industry's development. Without it, no reasonable assessment of the part wool played in the economic, social and political transformation of New South Wales is possible, though in spite of its non-existence historians have still been ready to attach a significance to various periods in the development of New South Wales derived from supposed developments in the wool industry. In particular, the years 1821 and

1822 have been variously cited as marking the beginning of a new phase of development in the colony: Brian Fitzpatrick chose 1821 since he

35 Beever's contention that the progress of the wool industry till 1828 was hampered by the colonists' p^E\Eerence for meat production shows how little Beever appreciates the reasons laying behind the development of exports in a new economy. 17 claimed, this was the year which saw the first wool exports of consequence; S. H. Roberts cited 1822 as 'a pivotal point," because 36 in that year John Macarthur was awarded gold medals in England, An examination of these two events in their context erases much of their implied dramatic quality and neither 1821 nor 1822 can be cited as marking the beginning of a new phase of development for the reasons suggested by Fitzpatrick and Roberts. More recently Beever has argued that 'the end of the 1820s marks a turning-point in the 37 history of the pastoral industry ' and by implication discounts the traditional importance imputed to the early 1820s, but his argument is based on contradictory and questionable premises.

If the growth of colonial interest in promoting exports is regarded as the product of an interaction between the amount of foreign debt and the amount of foreign exchange becoming available, then any change in the nature of the colony's development must be defined in terms of this interaction. Since government spending 38 provided the bulk of the colony's foreign exchange before the 1830s,

36 See J. P. Fogarty, "The New South Wales Pastoral Industry in the ^ 1820s", AEHR, vol VIII, No. 2, September 1968, p. 110. ( 37 Beever, o£. cit., p. 101 38 Whaling, sealing, sandalwood etc. provided some foreign exchange but were in the long-run of minor significance for the colony ’for the earnings of these exports seems to have been fluctuating . Though it has been claimed that the figures shown in New South Wales statistics for exports of oil, etc. obtained from whaling and sealing represent income accruing to colonists (see G. Blarney, "Technology in Australian History," BAH, vol. iv, no. 2, p. 120), it is more probable that they represent primarily the exports of non-colonial interests and as such only a fraction of these figures can be regarded as representing foreign exchange becoming available to residents of New South Wales. 18

interest in wool production would increase when colonists faced an

actual or potential absolute decline in government expenditure, or when

they considered government expenditure was falling, or threatening to

fall, permanently short of the volume of imports flowing to the colony.

What must be determined therefore is that period or point in time when

colonists were forced to realize that they could no longer completely

depend on Treasury Bills drawn by the government as a long-run source

of foreign exchange: when they realized that a substitute for, and

not just a complement to, this governmental source was essential. If

and when this condition appeared colonists had to regard the exporting

of the commodity for whose production the colony was best suited, as

an essential pre-requisite for its future progress, and that commodity 39 --in the then-current usage of the word--became the colony’s staple.

During the last quarter of Governor Macquarie's administration many

references to wool as the staple for the colony appeared. Edward Eagar,

in the analysis of the present state and £uture prospects of New South AO Wales he sent to Commissioner Bigge in October 1819, wrote: 'sheep

thrive well in this country, and great attention has been lately paid to

To claim that a particular commodity became an economy's staple when the value of the exports of the commodity exceeded the sum of all others limits the usefulness of the Staple Theory as a method of analyzing the process of development. Instead of delineating a staple in this ex post sense, it is better to define the staple in an ex . ante sense which allows the technological adjustments necessary for the staple in the jex post sense to everruate to be shown for according to this theory it is these technological ramifications which determine the nature of activity within the economy. 40 Bonwick Transcripts, Box 19, Mitchell Library. 19

the breeding and increase of the Merino.' '/Its/ wool . . . has been found superior to and equal to the Saxon.' 'Of all our colonial product­ ions it is that which finds and will continue to find the best and surest market.' Later in his survey he claimed, '. . . Wool may be considered as the great Staple Commodity of the Colony:' an opinion then shared by many or most leading residents of the colony.

Commissioner Bigge expressed similar sentiments, when he referred to fine wool as 'a valuable export' and as 'the great staple article of

/the colony's? future exports', ^ for in his opinion, wool was the only basis for the colony's future economic progress, and the promotion of wool exports was the only means by which the British government could be spared the expense of feeding and clothing convicts. He recognized that while ever the government purchased foodstuffs at reasonable remunerative prices from local suppliers and paid for them with Treasury Bills, there was little or no inducement for colonists to develop the production of commodities for export. To increase this inducement, the colonists' inclination to think primarily in terms of supplying the government market would have to disappear.

This inclination had been affected in the last quarter of the 1810s by the successful competition of Van Diemen's Land producers, who by

1820 were supplying the commissariat in Sydney with substantial amounts

41 J Bigge, Report of the Commissioner of Inquiry on the State of Agriculture and Trade in the Colony of New South Wales, (London, 1823), pp. 18, S3. 20 of grain. But it was primarily a growing inbalance between the total value of imports and that of government expenditure during the latter years of Macquarie's period which quickened colonial interest in the promotion of wool exports: a process which was to reach its culmination in the first year of Governor Brisbane's administration. As the President of the first Sydney Chamber of

Commerce later explained:

'It was not until the arrival of Sir Thomas Brisbane and the immediate curtailment of the Treasury Drafts /Bills7 to the Sum of L80,000 that the merchants first saw the necessity of collecting and encouraging such articles of export, as the ^ Colony afforded as returns for the gradually increasing imports.'

The measures Brisbane adopted in an attempt to reduce government expenditure might have been regarded by colonists as of merely passing significance except they knew that the British government had just a few years before instituted an inquiry into the functioning of its anti- podean prison, and that this had resulted in suggestions for major changes in its operation. The changes Brisbane made had therefore to be regarded as harbingers of other more major changes so that governmental purchases could no longer be considered as an ensured and sufficient future source of foreign exchange. The change in attitude can clearly be seen in the sentiments expressed by Sir

John Jameson in his presidential address to the first annual meeting of the colony's Agricultural Society, held in 1823, when he reviewed

^HRA, Series I, vol xii, p. 509. 21

the changes of the past year, and then continued: 'What we have to

look out for now is the importation of free settlers, and the export­ ation of fine wool. Nothing else will keep us in prosperity.'

The beginning of Governor Brisbane's administration in 1822 can

therefore be taken as a dividing line in the development of the economy.

Before it, colonists could regard the exports of wool and other colonial products as supplementing the Treasury Bill proceeds of sales to the commissariat: after it, they looked on such exports as the substitute for a source of foreign exchange with a dubious future. Exports became, in colonial eyes, a necessity for future progress from 1822 onwards: wool for which there was 'the best and surest market', became the acknowledged staple of the colony.

The history of the wool industry in New South Wales before 1851 can therefore be divided into two phases- the first ending with the end of Governor Macquarie's administration; the second beginning with the commencement of Governor Brisbane's administration in 1822 and continuing till the discovery of gold in 1851. Yet 1822 marked only a transition--the beginning of an acceleration: there was already momentum; the pedal was pushed to the floor; there was a momentary pause as the engine adjusted and then picked up. 1822 was in these

terms when the accelerator was pushed right down.

The developments in the wool industry from 1822 onwards can only be appreciated in the light of the previous evolution of the industry for the results of any acceleration can be calculated only if the initial 22 momentum is known. Part I of this study therefore attempts to

show the origins and development of wool-growing in New South Wales before 1822; to show how an export industry developed within the gaol

context. Part II conaders the period 1822-51--a period which has been

described as the pastoral age or as the years of the pastoral ascendancy

--and in this section, an attempt is made to outline the main features of the development of the wool industry, before turning to an examination of two aspects of the industry--its technology and cost structure--an appreciation of which, it is suggested, throws considerable light on the rtature pf the industry's development and, in particular, on the political demands of the pastoralists during this period. Having considered these demands and their results, the problem remains of assessing the significance of the wool industry in the economic development of New South Wales before

1851 and a discussion of this question forms Part III of this study. PART I

WOOL AND THE GAOL

ECONOMY 23

CHAPTER II

SHEEP FARMING IN NEW SOUTH WALES, 1788-1821

Whatever ultimate reasons- might have been implied in the British government's decision in 1786 to found a prison settlement on the east

«x coast of Australia, the immediate implicit aim was to establish an economical prison. Governor Phillips instructions were framed in the expectation that by the end of the second year of its existence the prison settlement would be self-sufficient; then, the only expense would be that of transporting convicts to the remote location. What

Phillip had to create was an economy capable of feeding, clothing and housing the convicts, their guards and the administration using the resources available in the colony, and those shipped in with the First

Fleet.

The livestock Phillip was ordered to procure en route to Botany

Bay formed part of this scheme. The cattle and pigs were to be the future source of meat: the sheep, a source of wool; possibly manure, for fertilizing of fields with flocks of sheep was then a common practice in England; and possibly meat. It is probable that the main use of the sheep was to provide wool for use with the flax known to be available on Norfolk Island in the manufacture of convict cloth­ ing: it is doubtful if they were thought of as a source of meat for 24

the ration scale was set out in terms of beef and pork. In the

absence of any explicit statements, it is possible only to surmize

the intended use of sheep in the new settlement but as things turned

out they were to have a greater significance than the original planners

could have visualized.

Governor Phillip bought ninety sheep for the future government

flocks when the First Fleet touched at the Cape of Good Hope in late

1787. Many perished before the Fleet arrived at its destination, and

of those which were landed only one remained by September 1788^:

lightning, native dogs and convict carelessness accounted for this

decrease in the government flocks. Better success attended private

efforts; of the thirty to fifty sheep bought by officers at the Cape, between twenty and thirty were still alive in September 1788.

The entire herd of cattle in the colony had wandered away from the

settlement in May 1788, so that a year after the settlement was begun, besides pigs, its entire livestock population consisted of about thirty

to forty sheep. The first substantial addition was the seventeen 2 cattle and fifty-five sheep landed from the Gorgon late in 1791 which brought the government livestock holdings to eighteen cattle and fifty-

seven sheep in November 1791. A further shipment of three cattle and

twenty sheep was brought from Calcutta in the Atlantic in 1792, but

this livestock was of dubious quality. 'The bulls being of the buffalo

1HRNSW, vo1. i, Part 2, p. 192. 2 Twenty-eight cattle and sixty-six sheep had been loaded on the Gorgon at the Cape. A previous cargo of livestock destined for the colony was lost when the Guardian was wrecked in 1789. 25 breed will not connect themselves with our cows', lamented Phillip and the only buffalo cow which was landed from the shipment was so debilitated that shortly after arrival she was 'lost by falling into 3 the water when going to drink'.' The sheep 'were of so diminutive a species, that unless the breed could be considerably improved by that already in the country, very little benefit was for a length of time 4 to be expected from their importation .'

By the end of 1792 there were twenty-three cattle and 105 sheep owned by the government and about one hundred privately-owned sheep in New South Wales. The colony was far from being self-sufficient in meat. To preserve the livestock, supplies of salt meat were sent from England, while to increase it^livestock was bought overseas for shipping to the colony. Losses in cattle shipments were high: during the second half of 1792, seventy-seven cattle were bought

(thirty-two at the Cape, twenty-seven in Calcutta, and eighteen on the west coast of America), but only six survived the voyage to

Sydney. Losses in sheep shipments were fewer: the Shah Hormuzear loaded twenty-seven cattle and 220 sheep in Calcutta and landed five cattle and 110 sheep in Sydney in 1793.

These 110 sheep were brought as a private speculation and passed into private hands so doubling the size of private flocks in the colony

^HRNSW, vol i, Part 2, p. 645. 4 D. Collins, An Account of the English Colony in New South Wales, (London, 1798), pp. 217-8. 26

By July 1794 when the first detailed livestock muster was taken, there were 516 sheep in New South Wales of which 418 were privately- owned, and 40 cattle of which eight were privately-owned? These livestock would have represented less than a week's supply of meat for the colony's population so that the main concern was to preserve and increase the number of livestock, particularly cattle.

Lieutenant-Governor Grose, who had taken over the administration of the colony in December 1792, sent a proposal to Whitehall in

July 1794 suggesting that the pastoral industry would develop more quickly if left in private hands, with the government importing cattle which on arrival were to be auctioned. Such a scheme was of course to prove unacceptable to the government: in fact Secretary of State Dundas in instructions he issued to the governor-designate

Captain John Hunter in July- 1794, ordered him to regard the increase of the colony's livestock population as of over-riding importance.

To ensure it Hunter was instructed to import as many cattle as he thought necessary; to prohibit 'settlers of every description from alienating or slaughtering without consent, the livestock which is granted to them;1, and if necessary to purchase for the crown 'at a reasonable price, the spare cattle of such settlers as have so increased their stock as to allow of their selling a part of it?'.

5 * * HRNSW, vol, SMI, p. 239. Included in the 418 privately-owned sheep were some brought on convict transports from Ireland.

Ibid, P- 237

Ibid, P- 225 27

Hunter took up duties as governor of New South Wales in September,

1795. The livestock muster taken three months previously showed there were 176 cattle (132 had arrived from Calcutta just a short time before) and 832 sheep in the colony. Of these eighteen cattle and 688 sheep were privately owned, practically all by officers of the New South Wales Corps or civil officials. The private pastoralists had concentrated on the less risky importing of sheep and were content to let the government import cattle and then try to use their wiles to get them from the government herds.

Governor Hunter had been in the colony during its initial years and was most impressed on his return with the progress made, particularly by the growth in the size of private flocks. He did nothing about importing cattle, justifying his inaction by referring to the lack of accurate in­ formation concerning the political situation in the Dutch settlements in the East Indies which he saw as the main source of supply. It was not until August 1796 after he had learned of the capture of the Dutch colony at the Cape of Good hope that he sent the Reliance and the Supply there to purchase sheep and cattle. They returned in June 1797 with fifty- three cattle and forty-three sheep bought for the government, and of much greater significance, some merino sheep.

Previously, except for a few sheep brought from Ireland on convict transports and a few brought from present-day California, the sheep in

New South Wales had all been obtained from either the Cape or Calcutta.

The Cape sheep were 'broad-tailed . . . with long legs and a small body, 28 with the fat collected mostly on the rump and tail . . .; of every variety of colour, and covered with a strong, frizzled hair, with an undergrowth of wool mixed with it.' The Indian or Bengal sheep were g 'small, lank, and thin . . . with a harsh, thin and wiry fleece. '

The introduction of the fine-fleeced merinos marks the beginning of the wool-growing industry in New South Wales and it is important to

see how their importation catne about. According to James Macarthur:

My father /Captain John Macarthur? was induced to turn his attention to the production of fine wool from observing the great improvement which took place in the fleeces of Cape and Bengal sheep, wich had been previously the only sheep-stock of the colony, by crossing them with some sheep bearing wool, which, I believe, came from England or Ireland ... In consequence of the success of this experiment, he was induced to request Captain Kent, of the navy, who was about to proceed to the Cape of Good Hope, to purchase there, if possible, some sheep of the Merino breed; these Captain Kent was enabled to procure at the Cape, and they were sent to New South Wales by another man-of-war, commanded, I believe, by Captain Waterhouse. My father obtained three rams and five ewes as his share of the sheep so introduced.

This statement, which formed part of the evidence James Macarthur gave to the 1837 Select Committee (of the House of Commons) on

Transportation, is unequivocal in its contention that John Macarthur initiated the move to obtain merino sheep. John Macarthur himself, in written statements he presented to Lord Hobart and the Privy Council

Committee on Trade and Plantations in 1803 and 1804 respectively was more

J. Bonwick, Romance of the Wool Trade, (London, 1887) pp. 24,31. The description of the Cape sheep Bonwick attributes to Bowmand; that of the Bengal breed to Simmonds. 29 circumspect, simply stating that in 1797 he 'procured from the Cape of 9 Good Hope three rams and five, ewes of the Spanish breed of sheep.

Sir Joseph Banks regarded the claims John Macarthur made in 1803-4 with some suspicion so in 1806 sought 'accurate information respecting the introduction of the Spanish breed of sheep at Port Jackson' from

Captain Waterhouse who had been the master of the Reliance in 1797.

Waterhouse's version of the affair puts a different light on the matter and has led at least one writer to claim that 'it is a popular error that he /Macarthur7 was the first to introduce the Merino breed of sheep to

Australia--let us give the credit to the gentleman to whom it is due--

Captain Waterhouse.' ^ According to the account given to Banks, when the two ships sent by Governor Hunter arrived at the Cape of Good Hope, it was learned that Colonel Gordon, the former commandant of the Dutch settlement, had died. Among his possessions was a flock of thirty-two merino sheep and his widow, wishing to leave the Cape, and to dispose of all her late husband's effects before she did,rgave three of the merinos to Lieutenant-Governor King and three to Colonel Paterson, both of whom were former friends of Colonel Gordon, and both of whom were returning to England. (Paterson shipped his three merinos to England to present to Sir John Sinclair, then a prominent and ardent advocate of the breed: King put his on board the Reliance to be shipped to New

9 John Macarthur's statements were reprinted in the Appendix to the Report of the Select Committee on Transportation (London, 1838) pp. 334-9.

. i 10 C. Mclvor, The History of Sheep Farming. . . (Sydney, 1893) p. 44. Banks' request and Waterhouse's account is given in HRNSW vol. vi, pp. 109- 12. 30

South Wales but they died shortly afterwards.) Mrs. Gordon offered to sell the remaining twenty-six to Commissary Palmer who was purchasing livestock for the government, but he declined the offer, so they were bought jointly for about L4 each by Waterhouse and Captain Kent of the

Supply. They divided the twenty-six sheep into two equal lots, and put one lot on each of the ships. As far aa Waterhouse could recall all those put on the Supply died before reaching Sydney (though it is more probable that four did survive), but ’more than half' of those on the Reliance were landed safely. Waterhouse first offered to sell them to Governor Hunter for the government's flocks but this offer was refused. John Macarthur then offered Waterhouse fifteen guineas each for the merinos subject to the condition that he could have them all but

Waterhouse rejected this offer and instead sold a few merinos each to various people in the colony.

Macarthur managed to get eight of the merinos--most of those Kent landed and some from Waterhouse. While others who obtained merinos used them indiscriminately for breeding, Macarthur endeavoured to follow the merino-breeding practices then advocated in Britain, i.e. of first crossing merinos with local breeds and then continuing to mate the female offspring with merino rams for four generations. This process was supposed to produce at the end of four crosses wool of a degree of fine­ ness- comparable -with -that- -of- a pure merino -sheep,- -but- -it must be remembered that Macarthur had only three merino rams in 1797 with which to begin this breeding procedure. The introduction of merinos into the colony's flocks, even in the indiscriminate manner generally adopted improved the general quality of the colony's fleece converting the hair-wool mixture which covered 31 the Cape and Bengal sheep into wool, but there was still a long way to go before this wool was improved sufficiently to capture British buyers' attention. Some 'Botany Bay' wool sent to Sir Joseph Banks, an ack­ nowledged British expert on merinos, in 1799 failed to impress him--in fact in 1799 the only use found for locally grown wool was as the weft of the coarse cloth woven in a government factory which had been established by Governor Hunter to provide employment for convicts unfit for outdoor work}^

While the despatch of these samples of wool to Banks in 1799 might suggest that there was local interest in the production for export, such interest would have been confined to only two producers, John Macarthur and the Reverend Samuel Marsden. They might have been interested in the possibility of exporting wool though the primary interest was supplying the raw materials for the local manufacture of cloth, for the ideal of a self-sufficient gaol still permeated official thinking about the colony}

Self-sufficiency involved weaving cloth from wool produced in the colony, a measure begun by Hunter, who was in all probability responsible for sending the wool samples to Banks, to whom he certainly sent samples of cloth manufactured at the government factory in Sydney.

Officers owned most of the sheep in the colony (see Table 1) during the period of Hunter's administration, though at this stage few, if any,

"^The despatch of the samples in 1799 is reported by H. B. Carter, His Majesty's Spanish Flock (Sydney, 1964), pp. 183-4. The use of wool in the government factory is described as HRNSW vol. iii, pp. 693-4. 12 See the remarks Governor King made in September 1800 concerning the possible use of locally produced wool. HRNSW vol. iv, p. 183. 32

of them would have intended staying there after their term of service ended,

and persons with even a superficial appreciation of what was involved in

producing wool suitable for British markets knew that this was essentially

a lengthy business. Instead, the officers were concerned in their business

activities in an immediate income in a form which could be transferred to

England where they wished to build up their savings, so during the seventeen

nineties they sought the profits available in the sale of imported merchandise

for which tastes acquired in England created a ready market. This mono­

polistically organized trade yielded handsome returns only part of which toas

in a form immediately transferable to England, the other part of the profits being in local 'currency'. Officers wishing to transfer their business

earnings to England on the completion of their terms of duty had to convert

the part of trading p\)£\fits made in local 'currency' into a form of foreign exchange, i.e. they had to somehow convert them into Treasury Bills, and

this involved selling something to the commissariat. Grain was the main commodity purchased by the commissariat but the amount it could purchase was limited, so to invest trading profits to finance an expansion of grain production (even assuming that labour was available) in the hope that the

commissariat would later purchase it^was futile. Furthermore, since governmental policy during Hunter's administration aimed at building up

sheep and cattle numbers, the commissariat did not purchase any fresh meat except pork, so there was no immediate market for mutton or beef though

it was planned that as soon as the livestock numbers were sufficiently large

the commissariat would start purchasing beef and mutton. But there was one other possible market, for Hunter had been empowered in his instructions to TABLE 1

The Number of Sheep in New South Wales - 1794-1810

Sheep

Government Officers Private Settlers Total

July 1794 108 418 526 June 1795 144 688 832 Sept 1796 191 1,310 30 1,531 Aug. 1797 383 2,064 2,447 Aug. 1798 416 3,486 3,902 Aug. 1799 508 3,843 752 5,10 3 Aug. 1800 625 5,499 6,124 June 1801 777 6,269 7,046 Aug. 1802 1,073 6,335 1,253 8,661 Sept 180 3 1,320 9,955 11,275 Aug. 1804 1,250 10,467 4,231 15,948 Aug. 1805 1,267 12,561 6,638 20,466 Aug. 1806 1,068 11,985 8,404 21,457 Oct. 1807 984 11,296 12,980 25,260 Nov. 1808 999 7,936 24,333 33,358 1809 n. a. n. a . n. a Apr. 1810 784 32,034 32,818

Source: HRNSW, passim. purchase surplus live stock from private owners, This/ meant that officers owning sheep or cattle could expect to sell them to the commissariat when they wished to leave the colony and obtain Treasury Bills which they could negotiate in England. This explains the officers* interest in sheep- raising before 1800; an interest which paid dividends for Mackellar, Kent and Foveaux who all sold their flocks to the government in 1800 when they were returning to England. Even Macarthur, in spite of the vision of the future of wool he is supposed to have had in the seventeen nineties, tried to sell his flock to the government in 1800 when he was planning to return to England, and it was only because he wanted premium prices for them that

Governor King sent eight of Macarthur's fleeces to England for assessment in 1800.

Governor Hunter's administration ended in September 1800. During its five years the number

176 to 1,044 and the number of sheep from 832 to 6,124. Only just over

ten per cent of these 6,124 sheep were owned by the government who owned however over seventy-five per cent of the cattle. Sheep-farming had been developed by private enterprise, cattle-raising which involved the high mortality rate of cattle on ships bringing them to the colony, had been

left to the government. Military and civil officers owned over eighty per

cent of the privately-owned sheep in the colony in 1800, and ninety-five per cent of the privately owned cattle. The development of sheep farming

till 1800 was therefore the result of their desire to invest their local business earnings in such a way that they could be converted into sterling when the occasion arose. Certainly there was no market for wool beyond 35 the small amount the government used in its factory and it obtained this by barter; neither was there any market for mutton, for the slaughtering of sheep or cattle was officially discouraged or forbidden. Nor was there any future market for wool in the opinion of most, if not all, of the officer sheep-owners in New South Wales.

Captain King arrived in the colony some months before he took over as governor. During this time he assessed the livestock situation and pronounced it favourable. In a report dated July, 1800, he stated that there was then sufficient livestock for both the colony's immediate meat requirements and for propagation, but shortly after he became governor in September 1800 he revised his ideas and reported that another three years would have to elapse before there were sufficient animals to provide meat for the colony, and so requested a further two years' supply of salt meat to be sent from England, 13 and entered into a contract for a large shipment of cattle from India.

At the same time, to reduce government expenditure he began to remove many persons from the government ration lists and by so doing increased the private consumption of fresh meat. This gave a present value to livestock raised by private individuals, both for selling in the private marketjwhich was however quickly monopolised by a few large graziers, and for raising and slaughtering for the owners' domestic consumption, though at the same time the contract King made to obtain a large number of cattle from India threatened the future value of the officers' holdings of livestock. But

13 HKNSW, Vol. iv, pp. 113, 181, 322. 36

of more significance for the development of wool production for export

were the general effects King's economy measures had on the New South Wales

economy.

In his analysis of the development of New South Wales during its

first thirty years W. C. Wentworth suggested that the years 1803-4 con-

stituted a watershed. Then for the first time, 'the colony was able to

raise a sufficiency of grain for its consumption,' whereas previously

when ’the necessities of the government were greater than the means of

the colonists to administer to them, the productive powers of this settle­

ment (i.e. agriculture) developed themselves with a degree of rapidity . .

from the moment supply exceeded demand, the colony may be said to have 14 continued stationary, with respect to its agriculture.' Colonists

realized, Wentworth claimed, that the returns from arable farming had

become questionable and limited,

so some part of those who, till then had been exclusively engaged in agriculture, turned their attention to the more beneficial occupation of rearing cattle . . ./while7many of the next richer class abandoned their farms, and with the funds which they were enabled to collect, set up shops or public- houses in Sydney . . . The Seal-islands too, which were discovered to the southward of the colony, furnished about the same period, an extensive and lucrative employment for the colonial craft, and contributed not less than the sandal­ wood trade ... It was also about this time that the valuable whale fisheries, which the adjacent seas afford, were first attempted.

In a letter he sent to Sir Joseph Banks in 1806 Captain Wilson wrote

14 W. C. Wentworth, A Statistical, Historical and Political Description of New South Wales (London, 1820), p. 210.

~^Ibid . , pp. 213-4 37

When the colonists had clear'd so much of their woody country, till'd and cultivated it, so as to raise more grain than the colony requir'd . . . the agriculturists, knowing that exports in grain were altogether impracticable, resorted to the external, though near, resources of the colony, viz. in procuring se^.J.- skins about Bass's Straits, and subsequently elephant oil.

Governor King referred to the effects the progress in agriculture in a despatch dated December, 1804, when he stated; 'now the colony supplies itself with grain . . . the inhabitants ought, and must of necessity, turn a part of their attention to some other object besides the culture of grain and the fisheries in Bass's Straits, which is the only natural 17 staple that has yet been discovered.'

Interest in export production first appeared around 1803, partly because by then the colony was producing more grain than it needed, and partly because Governor King by reducing quite drastically the volume of Treasury Bills drawn in New South Wales had lessened its ability to purchase imports. It was this latter development which primarily forced colonists to exploit such resources as could be immediately utilized for export production in order to obtain the means of financing the import ingredients of the profitable internal trade which had developed in the 1790s. The volume of imports arriving in 1803 outstripped the colony's means of payment and the only solution was to increase exports, according to the author of an anonymous letter, printed in the Sydney

Gazette of of May 1, 1803. He wrote:

16 HRNSW, Vol. vi, pp. 100-1 17 Vol. yf, p- *25. 38

I admire the progress of Commerce in our remote Colony, yet the pleasures of imagination are subject to a portion of alloy, which throws a gloom upon the images of anticipating fancy; as, from the want of a Staple, our Commerce cannot be supported upon the principles of Barter, but Importation, until an Export be provided, must necessarily drain the Colony of its specie . . The Colliery at the Hunter's River opened an invitation to adventure, as it offered a freightage not altogether contempt­ ible, and the encouragements held out to the Oil and Fur trade in Bass's Straits, both which, altho' at present carried on upon a limited scale, may hereafter become generally consequent­ ial. The Increase of Spanish Wool may also hereafter become an object of export ... A Staple Commodity must be raised by the industry of the inhabitants

The inclusion of Spanish (merino) wool in the list of potential exports does not imply that the colony was then in a position to export fine wool: it is derived from the favourable comments Sir Joseph Banks made on some of the eight Macarthur fleeces which Governor King had sent him. Banks' report had been printed in the Sydney Gazette just a short time previous to the appearance of the letter where Spanish wool is referred to as a possible export. 18 Banks' report was however limited in its optimism, assessing only two fleeces at all favourably of the eight fleeces sent, he reported that one from a male lamb bred from an imported merino ewe^was 'worth 5s, per pound;3 the ewe's own fleece was worth '4s. per pound, if not more;' one off a daughter of the same imported ewe^had 'little or nothing of the Spanish breed;' while one from a male lamb bred from this latter ewe^ showed

'nothing scarce of the Spanish breed.' Banks suggested that wool from pure merinos or near-merinos would find a market in England but such wool represented only a minute fraction of the colony's wool-clip. But the

18 HRNSW, Vol. v, pp. 80-1. 39

report did point to a possible export even if it would be a matter of

time before this possibility could be converted into a significant actuality

Captain John Macarthur had left New South Wales before Banks* report arrived, having been sent to England to stand trial for his part in a duel with his commanding officer. He had taken with him a number of

fleecesjin all probability so as to substantiate his claim for higher prices he had sought for the sheep he wanted to sell the government, but

shortly after he arrived in England he began to receive considerable attention from 'the deputies appointed to attend the progress of the

Woollen Bill for repealing certain laws relating to the woollen manufactures

The bill, which was aimed at having twenty-three statutes (including some of longstanding) repealed or amended, was making little or no progress 19 through the House of Commons during the early months of 1803, and this accounts for the way the deputies welcomed Macarthur. The woollen manu­ facturers were basing their case on the fact that similar restrictive

legislation had been repealed in the cotton industry, but the woollen operatives, who wished to have the twenty-three statutes not only retained but enforced, argued 'that cotton being an article of unlimited production,

it was found necessary to remove the restrictions imposed under the statutes

in question, to afford all possible encouragement to its manufacture; whereas wool being an article of limited production, the parallel could not 20 hold.' The only way the woollen manufacturers could discount this argu ment was to point to a source of wool which was not subject to political

See The Times, February 14 and April 7, 1803. 20 J. D. Lang, An Historical and Statistical Account of New South- Wales, (London, 1875), Vol. II, p. 52 40

limitations, such as was Spain, then the main source of fine wool; to some

source which could remove the dependence on Spain within the foreseeable future.

In these circumstances Macarthur had arrived with his fleeces at a most

opportune time for the deputies, while in turn their interest was most op­

portune for Macarthur.

Macarthur had fleeces which woollen manufacturers could pronounce to be

of 'a softness superior to many of the wool of Spain; and . . . certainly equal,

in every valuable property, to the very best that is to be obtained from thence.'

Furthermore, Macarthur would assure Lord Hobart in Julyy 1803, that the number

of sheep in New South Wales 'will, with proper care, double themselves every

two years and a half; and in 20 years they will be so increased as to produce 21 as much fine wool as is now imported from Spain and other countries.'

This calculation proved wrong; not unexpectedly, for as Macarthur himself

later admitted, it was very much the product of the circumstances in which it was made. Its large margin of error became more obvious as time passed and

Macarthur's detractors repeatedly sarcastically referred to this claim during

the eighteen twenties. One of these attacks in the late twenties made Macarthur attempt to explain why the calculated prophecy had proved wrong.

He began^disclaiming responsibility for the calculation stating that it had been made by a committee of woollen manufacturers (undoubtedly keen to bolster their case for the repeal of the restrictive legislation), though even

if this was the case, it had not stopped Macarthur from using, justifying and

21 See Note 9 above. 41 embellishing the calculation in 1804. He then continued:

I originally thought that four crosses with merino rams would improve the crossbred sheep to an equal state of fineness with the true bred merino. Experience however has taught me that ten crosses would not produce that effect, and I quickly discovered after my return to the colony that I had made a great mistake in my calculations, and that, attributable to the change which crossing had made in the constitut­ ions of the sheep. The thoroughbred India-Cape sheep and merinos lived to a great age. They had been allowed to breed twice a year and the Bengal sheep always had twins - the Cape sheep frequently do too, but as the cross with the merino blood advanced the young sheep became delicate and sickly and the ewes seldom lived to rear more than three lambs - often not more than one - and the lambs were as tender as their mothers and suffered great mortality. This creat­ ed such a prejudice against the merino sheep that few people would use the rams but continued to breed with the original hair-bearing rams. It was not until many years after that I discovered the great tender­ ness of the mixed-breed sheep did not proceed from the merino blood, but from a general law of nature that almost always causes a deterior­ ation of constitution where crossing is pressed on more than two generations. Luckily I was not frightened by this ill success but continued to use merino rams.

Yet the slower breeding rate of merinos was supposed to have been taken into account in calculating that the number of sheep would double every two and a half years, for in the "Statement of the Improvement and Progress of Fine

Woolled Sheep in New South Wales" he delivered to Lord Hobart in July 1803, where the calculation first appeared, Macarthur had pointed out:

This statement proves that the sheep have hitherto multiplied more rapidly than it is caluclated they will do in future; but this is attributed to the first ewes being of a more prolific kind than the Spanish sheep are found to be; for since Captain Macarthur has direct­ ed his attention to that breed, he has observed the ewes do not so often produce double lambs. ? 3

The limited data supporting Macarthur's original claim and its patent political purpose were readily discerned by Sir Joseph Banks who dismissed it as 'a mere theoretical speculation, unsupported by any decisive evidence in its favour.' But Banks was not, as many later portrayers suggest,

Macarthur Papers, Vol. 69, Mitchell Library. The idea of four crosses was not originated by Macarthur. 'The generally accepted theory was that a British ewe crossed by a Merino ram, and her female progeny then mated back to Merino blood for three more generations, would produce a British Merino possess­ ing both the fleece quality of the Spanish sheep and the virtues of its British completely opposed to Macarthur*s visionary enterprise. He was willing to at least allow Macarthur the opportunity to prove his claim, for he went on to state:

It will in my opinion be time enough for government to interfere when the industry of individuals has grown and sent home a few tons at least of their wool, and thus ascertained the price at which it can be afforded at our market, and its comparative value on manufacture when compared with real Spanish wool; and there is no doubt, that, if the trade proves nearly so profitable as Captain Macarthur expects it to be, we shall soon obt^n some supply of wool and complete information on the subject.

Banks was not the only one in London who remained unconvinced by

Macarthur's prognoses. The proposal Macarthur put forward in 1804 for the establishment of a 'Company to encourage the Increase of Fine Woolled Sheep in New South Wales' lapsed for want of support, even though Banks had re- 25 commended that it should be given the use of a million acres of land.

The memorial Macarthur presented to the Privy Council's committee 'for the consideration of all Matters relating to Trade and Foreign Plantations' in July 1804 was designed to dispel 'some doubts /that7 have been expressed of the practicability of increasing the production of fine wool in New South

Wales, to the extent that has been described in the memorials which have been

ancestry.' R. Trov-Smith: A History of British Livestock Husbandry, 1700- 1800. (London, 1959) p. 286. 23 See note 9 above. 24 Quoted by Carter, 0£. cit., pp. 430-1. See also p. 497 where Carter explains how this part of Banks' statement was found and the difference it makes to previous claims concerning Banks.

25HRNSW, Vol. v, p. 459. 43 presented by me . . .to the Treasury.' Macarthur did not completely succeed in dispelling doubt,for he was not granted the ten thousand acres he requested, but a compromise five thousand acres in a choice location.

He returned from an unconvinced London to a cynical Sydney, bringing nine rams and a ewe he had purchased at a sale of merinos from King George Ill's flocks at Windsor; a cargo of goods to sell in the colony; and a whaling ship, for as he later explained, perhaps plausibly, he was establishing himself in the colony 'for the express purpose of uniting such commercial objects with his agricultural undertakings as may best enable him to prose- 27 cute the latter with vigour and effect.' The explanation^proffered when applying in 1806 for a licence to trade in sandalwood, scarcely suggests that Macarthur was single-minded in his efforts to supply England with all its fine wool requirements in twenty years. peop'c Macarthur's claims convinced some^/in London for ships arriving in 28 Sydney in late 1806 'had orders to purchase what wool was ready.' In

Sydney his claims were, as might be expected, regarded with cynicism.

Governor King in despatches he sent to Lord Hobart in 1804 was frankly sceptical concerning the claims Macarthur had made in London in 1803; was more guarded in despatches he sent in 1805 to Hobart's successor and

Macarthur's mentor, Earl Camden; but was openly critical in a letter he 29 sent to Sir Joseph Banks in July, 1805. Others in the colony were as

2^See Note 9 above. 27HRNSW, vo1. vi, p. 92. no Ibid., p. 358. 29 HKNSW, vo 1. v, pp. 672-3. 44 doubtful of Macarthur's claims as King. The Reverend Samuel Marsden, who had devoted at least as much time and effort to sheep-farming as Macarthur, claimed that 'the number of true-bred Spanish sheep have been and still are so few, that no certain general practical principle can be established , 30 respecting them.’ Major Johnston also dismissed Macarthur's calculations, stating:

unless the sheep should be all of one pure breed ... no specific inference can be drawn either of the quantity or quality of the wool which they will produce . . . for experience shows, in New South Wales, that an ewe with a fine fleece, removed three or four generations from the Cape or Indian breed, tho1 she may be put to a Spanish ram, will sometimes bring forth a lamb covered with hair or spotted like a goat, and similar to the original breed from which she sprang.

The consequences of such scepticism became significant because of local thinking about sheep-breeding. Governor King in the report on 'the increase 32 of sheep and improvement of wool' he sent to Earl Camden in 1805, stated that the main hindrance to increasing the number of merinos was the 'general opinion' in the colony that 'the weight of mutton and fineness of wool' were incompatible. While the settler could sell his surplus rams and wethers

(killing ewes was forbidden) for slaughtering and so obtain 'the immediate means to provide the necessities of his family,' there was no inducement for him to consider fine wool production, and in any case, King observed, the coarse wool which the unimproved sheep in the colony produced, could be used

30 Ibid., p. 691 31HRNSW, vo1. vi, p. 180. 32 HRNSW, vo1. v, pp. 698-708. 45

for domestic spinning or in the government factory.

The production of fine wool, the only type of wool then considered

suitable for export, required four successive crosses between merino and

local breeds which took seven years before wool of a fineness comparable

with pure-bred merinos was obtained. This lengthy process may have been

considered tolerable by colonial sheep farmers except that fewer lambs and

lighter carcases were obtained when breeding with merinos. The choice

was therefore either to forego some of the short-term returns from mutton

production in the hope of benefitting in the long-run from exports of fine

wool; to continue to breed from the larger-carcassed colonial sheep for mutton; or, to try to obtain good carcases and good, but not fine, wool.

Marsden chose this last course and sought 'to improve the constitution of

the sheep, the weight of the carcases, and the quality of the wool,' 33 considering this best served his 'present interest.' Macarthur was the

only sheep breeder in the colony wholly committed to merinos but sheep

breeding was only one of his interests, and besides, he had found on his

return to New South Wales that the number of sheep in his flocks was less

than he had expected d***, he claimed, to'a want of proper assistance to take 34 care of them.' Prospects in 1805 for the future progress of the production

33Ibid . , pp. 690-1. 34Ibid., p. 670. 46 of fine wool for export were inauspicious, for though, because of the decreased volume of government expenditure there was an acute need to develop exports, the south-eastern shores of the colony and the Pacific

islands were providing articles such as sealskins, seal oil, sandal- 35 wood and trepang for which there was a ready market in China. Since

these commodities were available, wool could be regarded simply as a long

term prospective export, and this is how it was regarded during the latter years of King's administration.

Governor King's reduction of the number fed by the government had

increased the private meat market while the growth of the colony's capacity

to produce grain had turned the attention of many former agriculturists

to pastoral farming. The immediacy of the demand for meat and the supposed

incompatibility of fine wool and meat production meant that the meat pro­ duction was emphasized at the expense of fine wool production. Governor

King pointed out in 1805 that interest in the latter could only develop 36 when there were enough cattle in New South Wales to provide its meat.

Writing some fifteen years later, Wentworth explained that 'many gentlemen

. . . who have large flocks, sensible of the folly of breeding sheep for

the mere sake of carcases, which, in the consequence of the limited

population, and unlimited extent of grazing country, have already become

of inferior value . . . entered some years back on . . . /Macarthur's7 37 system.' Unfortunately Wentworth does not state when the 'some years back' was, so to ascertain when this most probably occurred, and if it had

35 For a discussion of these export industries see Chapter l

There were two possible markets for fresh meat in New South Wales:

(i) the commissariat, which provided meat for the convicts, military and civil personnel victualled by the government; and (ii) the private market for meat providing for those not victualled by the government. The commissariat demand was the smaller, for between 1803 and 1821 the number receiving rations from the commissariat was never more than half of the total population and was generally nearer one third, while this market was further limited by the amount of salt meat the government imported from time to time. The non-victualled population obtained meat either from subsistence production, or by purchases from the private market. The total consumption of meat in the colony was therefore the sum of the consumption of imported salt meat, subsistence-produced meat, fresh meat bought by the commissariat, and meat bought by the private individuals. The degree to which meat prod­ uction was motivated by considerations of price was established till 1808 by this last element in the total consumption.

There was a private market for fresh meat from 1800 onwards#though returns of the number of livestock slaughtered between July, 1804, and

August, 1805, suggest that it was limited in size, while the orders

Governor King issued in March, 1802, regulating the sale of meat to butchers and the prices at which meat was to be sold,were designed to end the mono­ poly existing in this market. These regulations were criticized in the

English press^leading King to comment: 'I consider it my duty ... to regulate in an equitable manner the price of food as it becomes more plenti- 48 ful, and not to sanction a continuation of the high prices which the cupidity of one or two great stockholders think proper to impose on the ,38 inhabitants. But the regulations were readily circumvented by the monopolists, so that the private market for meat remained the preserve of a few suppliers. Luttrell who came to the colony as a settler in 1805 found this, for while he had purchased 'six hundred pounds' worth of sheep' on his arrival he soon found that 'it was likely to be a very losing 39 concern' and so sold more than half his flock.

There were no commissariat purchases of fresh beef or mutton made before 1808 and from then until 1810 purchases were of limited significance both in terms of the quantity purchased and of the number of suppliers.

During Hunter's administration large quantities of fresh pork had been purchased by the commissariatjbut Governor King on assuming office had reduced the price so much that no supplies of pork were offered, producers preferring to retain it mostly for their own use. As part of his economy programme King had calculated that a saving of L3 14s. per ration could be made if only salt meat was issued, so throughout his administration salt 40 meat obtained from England, visiting ships or Tahiti was the only meat issued to the convicts and military. A few cattle from the government herds were slaughtered to provide fresh meat for the governor and officers, and sometimes fresh meat was issued to patients in the government hospital.

The quantity of salt meat in the ration varied, and when grain was in

OQ HRNSW, vol. v. , P- 516. See also HRNSW, vol. iv, pp. 727, 753 39 HRNSW, vol. vi, P- 294. 40 HRNSW, vdl. iv, pp,. 212, 378. 49 in short supply and supplies of salt meat plentiful, the amount of meat issued was increased and that of grain reduced, while if grain was plenti­ ful an adjustment was made by which more grain and less meat was issued.

In March^ 1806, the ration included four pounds of salt meat, (either pork or beef); in August^ 1806, five and a half pounds of salt pork or nine pounds of salt beef; in February, 1808, two pounds of salt pork for the convicts, with an additional three and a half pounds of fresh meat for the military; and in January^ 1810, four pounds of salt pork or seven pouhds of fresh beef, and this remained as the ration till 1821.

A shortage of salt meat in February^ 1808, had necessitated a reduction in the amount of salt meat issued to the convicts, but the insurectionary administration, being conscious of their need to keep the soldiers' favour provided them with a supplementary ration of fresh meat. It was for this

supplementary ration that fresh beef and mutton were first bought for the commissariat store. .Most of the meat needed for the ration was obtained by slaughtering cattle from the government herds, but some was bought at a shilling a pound from stock owners, though it is doubtful whether these purchases were necessary^for in one instance fresh mutton was bought from

John Macarthur and paid for in fresh beef. Purchases of fresh meat for the

commissariat continued to be made through 1808, the price paid being reduced

to ninepence per pound in October^ 1808.

A transport ship arrived in January^ 1809, with supplies of salt beef and pork which relieved the shortage felt in the previous year, and pur­

chases of fresh meat were then discontinued, for in March^ 1809, Paterson 50 who was then in charge of the colony, sought the approval of the Secretary of State to resume the purchasing of fresh meat, explaining:

the colony may very soon, if proper measures are taken, be independent of animal food, and . . . the most material benefit will arise from taking such meat as is tendered into the stores at an equitable price proportionate to the expenses attending the importation of salt meat, which at the same time . . . will decrease the necessity of transporting wet provisions from England, /and7 will encourage the settlers to pursue their exertions in feeding beef and mutton.

These purchases made intermittently in 1808 and 1809 were replaced after the arrival of Governor Macquarie in 1810 by regular purchases of meat by the commissariat. The quantities purchased between 1811 and 1819 are shown in Table 2, and when these quantities are compared with estimates of the amount of fresh meat which would be required in each of these years

(assuming fresh meat was issued at the established ration of seven pounds per week), it may be seen that only from 1816 did the amount purchased represent any significant proportion of the amount required. Taking into account the meat obtained from the government's own production (of which no record remains), it would appear that from 1816 till 1818 the supply offer­ ed exceeded the demand, and certainly there were complaints made from 1816 about supplies of meat offered to the commissariat being refused. G. Palmer offered 48,000 pounds in 1816 but had only 30,000 pqunds accepted; Brooks, a large cattle owner, was also able to sell only part of the amount he offered; while Blaxland in his evidence to Commissioner Bigge stated that the increasing difficulty in selling meat to the store had made him feel

41 HRNSW, Vol. vii, p. 85 51

TABLE 2

Commissariat Purchases of Fresh Meat in New

South Wales - 1811-19

Quantity Purchased Estimated Annual Requirements ('000 lb) ('000 lb)

1811 638 n. a. 1812 738 1,226 1813 548 1,152 1814 865 1,163 1815 658 1,237 1816 1,167 1,259 1817 1,299 1,690 1818 1,588 1,606 1819 1,372 2,251

Source: Bigge Appendix. Bonwick Transcripts Box 12. 52 42 'the same way that the holders of South Sea stock must have done.' This

suggests that the needs of the government market, which would absorb the production above that needed for the private market where better prices than

those given by the government prevailed, were fully met by 1816. If, as jKing and Wentworth claimed, interest in the growth of fine wool had to await

the saturation of the meat market, then some manifestations of this development

should have appeared about this time. To a very limited degree they did, though

contemporary comment suggests that a marked increase in the use of merinos for breeding came later in the Macquarie period possibly in about 1818 or 1819.

’While the development of excess capacity in the meat market appeared in the

■middle years of Macquarie's administration, by 1819 the colony was not able to

supply its own meat requirements yet at the same time interest in the production

of fine wool was growing. This latter development cannot be explained simply by reference to changes in the capacity of the colony to produce its own meat

or in the comparative prices of meat and wool and must be seen in relation to

the growth in wool exports during the Macquarie period.

The first shipments of wool from New South Wales were small and ex­

perimental. In February 1807, Marsden left for a visit to England taking with him some wool he had raised, which he had woven into cloth at a Yorkshire mill.

In 1808 John Macarthur sent a small quantity of wool to London |n the Dart and

though the wool was damaged in transit it was favourably assessed by a London ^ 3 wool merchant. After his return to the colony Marsden 'collected all the wool

/ O zBlaxland's evidence is to be found in the Bonwick Transcripts Box 25. For the complaints of Brooks and Palmer see Box 14 and Box 15 respectively.

43HRNSW, vol. vi, p. 779. 53 saved during his absence (must have been inferior) and sent it to a house in Hull who allowed him 3s. 9d. a pound after deducting the expenses of 44 washing.' This was in early 1812, and the Sydney Gazette reported on

September 26, 1812, that the 'flattering accounts' received in the colony concerning the prices Marsden had received for his wool had induced

'opulent persons' to consider improving the quality of the wool produced by their sheep, for wool might become 'an object of the very first importance to the colony.' In November^ 1812, there was a report that Marsden intended 45 to send another three or four thousand pounds of wool to England: whether he did is not known, but the previous shipment of about four thousand pounds had demonstrated to colonists what had previously been discussed only on a theoretical plane--that New South Wales wool, in this instance non-fine wool, could sell at a renumerating price in England.

This discovery came at a time when the colony was experiencing an economic crisis, brought about, according to Hannibal Macarthur (the nephew of John

Macarthur), by the system of economy then being pursued by the governor, which meant that 'colonists are confined to their own resources which are 46 very inadequate to the purchase of cargoes from Europe.' The value of the cargoes consigned from overseas in the expectation that government expenditure would continue at the high levels set in 1810 and 1811, exceeded the colony's capacity to pay for them, so that colonial importers faced not only the

— Macarthur Papers, Vol. 5, Mitchell Library. This information is given in a letter written in 1812 by Hannibal Macarthur to his uncle John Macarthur who was then in London. 45 Sydney Gazette, November 28, 1812. 46 See Note 44. 54

immediate problem of a glutted market but also that of meeting the debts

they had contracted prior to 1810 when export earnings from government

expenditure, sealing and the sandalwood trade had not matched the volume

of imports. Wentworth described the conditions which existed after 1804

as follows:

The settler continued in the same career of thoughtless extravagance, which his circumstances, when they were even in their most flourish­ ing state, had scarcely permitted, and the merchant went on advancing him goods . . . need I state the consequences? The extended credits, which the first merchants thus gave the settlers on the strength of the progressive increase of their produce, rendered them at last unable to fulfil the engagements, which they had contracted with the British and East India Houses.

Though the volume of Treasury Bills was E91,019 in 1812 as compared to

E92,128 in 1811, much of the expenditure in 1812 was for grain purchased

outside the colony, while in 1813 the volume of Treasury Bills was reduced

to E57,948 and never reached the levels of 1811-2 again till 1816. While

local importers were thus faced with this diminished volume of foreign exchange arising from government expenditure, they were also faced by demands from merchants in India for the payment of the debts they had

contracted previously. The decreased earnings from government expenditure,

the inability of the existing export industries to expand, and the proof afforded by the prices Marsden had received for his 'inferior' wool arous­

ed interest in the colony from 1812 onwards in exporting wool.

Following the export of Marsden's wool in 1812, further shipments were sent in 1813 l>n the Minstrel which sailed in June^ 1813, with a cargo

47 Wentworth, op. cit. , P- 232. 55

according to the Sydney Gazette, of 'about twenty tons of colonial . ,48 wool, and $n the James Hay which took five casks of wool. In

October, 1814, Suttor, a local settler was able to inform Sir Joseph

Banks that in spite of the drought the livestock numbers were increasing

and the value of cattle consequently falling, but 'sheep keep a better

price from the expectations of the value of our wool . . ./for7 wool is

likely to be an object of the first importance to the Colony.' He

further informed Banks that a quantity of wool was then being loaded f>n

the Seringapatam: a quantity shown in shipping records as th|j/ity-five 49 bales and forty-two casks of wool?

These early exports of wool are not recorded in either of the two

official tables of wool exported from the colony, extant, i.e. the table

which appeared in the 1828 Report of the Select Committee on the British

Wool Traded and the table in the 1838 Report of the Select Committee on

Transportation, both of which tables were derived from English custom­

house returns. These tables show identical quantities of wool exported

in each of the years between 1818 and 1821, but for the years previous to

1818 the quantities of wool exported are the same but the 1838 Report

figures lag the exports by one year as compared to the 1828 figures, so

that in the 1838 Report table, 245 pounds of wool are shown as being

_ Sydney Gazette,

"^See C.M.H. Clark, Select Documents in Australian History, 1788-1850, (Sydney, 1950) p. 270. 56 exported in 1807. In the light of the dating of this first export it would appear that the 1838 Report dating is the more acceptable, so that the 1807 export as in that table would represent the wool taken by Marsden, and the 1808 export, the wool sent #n the Dart by Macarthur, though the source of the 167 pounds shown in it as exported in 1811 cannot be ascertained.

TABLE 3

Wool Shipped from New South Wales, 1807-1821

Year Wool, lbs. Year Wool, lbs

1807 245 1815 32,971 1808 562 1816 73,171 1809 1817 13,616 1810 1818 86,525 1811 167 1819 74,284 1812 1820 99,415 1813 1821 175,433 1814

Source: Report of Select Committee on Transportation, 1838.

Surprisingly the table shows no exports for the years 1812, 1813 or

1814, though there is evidence in shipping records, the Sydney Gazette, and private correspondence (such as the letter Suttor sent to Banks) to show that exports were sent in these years. Marsden sent some four thousand pounds weight of wool in 1812, and for 1813 shipping records show

142 bales and five casks of wool as shipped from Sydney, which would represent about 35,000 pounds of wool. For 1814 the records show about

17,000 pounds of wool sent fn the Seringapatam, and for 1815, 188 casks and seven bales totalling about 35,000 pounds of wool^which would

J. S. Cumpston, Shipping Arrivals and Departures - Sydney, 1788-1825, (Canberra, 1963) pp. 87, 89, 93, 97. 57 approximately correspond to what would be a net figure shown in the

1838 Report table. The total of the exports of wool from Sydney in the period 1815-21 estimated from shipping records would be in the vicinity of of 400,000 pounds while that taken from the 1838 Report would be over

500.000 pounds, but the shipping records do not record any wool being sent from the colony in 1816 though there is evidence outside of the 1838

Report figures to show that wool was exported in this year. There are obvious deficiencies in both sets of data, so that the two cannot be inter­ locked to provide a consistent series: at best they can be used as the basis for a broad indication of the growth of exports.

What is obvious is that wool was exported from New South Wales each year from 1812 onwards, and that from an average annual export of about

28.000 pounds in the period 1813-15, it had grown to about 80,000 pounds per year in the period 1817-20, and to 180,000 pounds in the years 1821-23.

This growth in exports absorbed an increasing proportion of the colony’s wool clip, so that where in the first of the three periods, may^e one- third or less of it was exported, by 1817-20 about a half was being exported, and in the last period, nearer three-quarters: the remainder of the clip being used mainly for the local manufacture of cloth and blankets.

The wool Marsden sent in 1812 had fetched 3s 9d. a pound, while twenty-one bales of wool bought for sixpence per pound in Sydney, by

Simeon Lord and sent to Wormald and Gotts of Leeds, fetched 2s. 6d. per 52 pound. Wool from sheep with only a trifling drop of Spanish blood sent

52HRA, Series I, Vol. viii, p. 230. 58

to London by Riley and sold in 1814, though 'it was badly washed and

indifferently sorted' fetched an average of 2s. 6d. per pound with the 53 best lots getting as high as 5s. 9d. per pound. These favourable prices

for non-fine grades of colonial wool meant there was an immediately export­

able commodity for local merchants who initially shipped this wool to

London as payment for consignments of imports. The pressure to export

continued however for though the worst of the crisis had run its course by

1815, merchants still had to pay for consignments previously received as

well as those arriving in the colony. The volume of commissariat expend­

iture grew from 1815 till 1821^but an increasing proportion of the government's 54 grain requirements was obtained from Van Diemen's Land whose agriculturists

enjoyed natural advantages not possessed by local growers, so part of the

growing commissariat expenditure in New South Wales was for grain grown

outside the colony. Furthermore though the volume of Treasury Bills drawn

in New South Wales increased from L109,117 in 1816 to L189,008 in 1821, the volume of imports increased in the same period from L141,769 to L195,136"?"*

Only in 1819 was the volume of imports received in New South Wales less than

the volume of Treasury Bills drawn: the former being L134,218 and the

latter L153,956, though in this year grain and salt meat to the value of

possibly more than the difference was bought from Van Diemen's Land suppliers

53 Sydney Gazette, Feb. 4, 1815. 54 W. C. Wentworth, A Statistical Account of the British Settlement in Australasia, (London, 1824) Vol. II, pp. 311-12.

55Ibid., Vol I, p. 462. 59 by the commissariat. The inadequacy of government expenditure to meet the cost of imports was marked during the latter half of the Macquarie adminis­ tration so that colonists' interest in exporting was maintained and intensified in this period.

The prices obtained in England for New South Wales wool continued to offer ample remuneration to local exporters till 1818, but from about then a decline became evident. This decline was referred to by some of those who gave evidence to Commissioner Bigge. William Cox, a substantial wool grower, stated that he had obtained good prices for his wool in 1817, when he receiv­ ed an average price of 3s. l%d. per pound even though some of it was coarse and in his opinion 'not worth more than 2s 2d.,' but in succeeding years 5 6 the prices his wool fetched were lower. Riley also commented that the prices

'of late were not so good as formerly,' due, he thought, to the depression in England in 1819^57 *This decline is evident in the prices obtained at public auctions of New South Wales held in London, the first of which was held in February, 1818.

Whereas in July^ 1816, John Macarthur could report to Earl Bathurst that he had recently sold fifteen thousand pounds of wool and that his wool clip for the next year was already spoken for, in August 1821 his agent informed him that he had been extremely fortunate to obtain the prices he did for his 58 wool at the recent sale. Certainly some of the prices paid at this, the first public auction in London entirely devoted to Australian wool, were

5 6 Bonwick Transcripts, Box £ , Mitchell Library.

"^Bonwick Transcripts, Box , Mitchell Library. 58 Macarthurs Papers, Vol. 2, Mitchell Library. 60

TABLE 4.

Prices Obtained at London Auctions of New South Wales

Wool - 1818-1821

Date of Sale Range of Prices Average Price Vendor

February, 1818 3s.6d - 5s.6d. 3s.7d. J. Macarthur May, 1818 2s.lid. - 3s.2d. 3s. Id. Oxley May, 1818 2s.9d. 4s .Od. 3s.6d. J. Macarthur September, 1818 3s.2d. - 4s.Id. 3s.6d . J. Macarthur

June, 1820 2s.7d. - 4s.9d. 2s.8d . J. Macarthur August, 1820 Is.4d. - 3s.lOd. 2s.7d. J. Macarthur

August, 1821 2s.5d. - 10s.4d. 3s.Od. J. Macarthur August, 1821 2s.5d. - 2s.lid. 2s.lOd. H. Macarthur August, 1821 Is.7d . - 2s.6d. Is.lid. Oxley, Wood, Howe. August, 1821 ls.2%d. - ls.lOd. Is.4d. Berry 6c Wollstone' craft; Jones, Riley & Walker

Source: Macarthur Papers, Vol. 69, Mitchell Library.

extremely high and prompted the Sydney Gazette to express the hope that 'culti- 59 vators will be excited to share in the rich harvest.' But the sale could not

be considered as an unsullied success for at this sale,

one bale containing the best wool of Mr. Macarthur's flocks, sold as high as 10s. 4d per pound, and two at 5s. 6d. per pound, but out of 326 other bales, that were imported at the same time, 223 sold at prices from Is. 2^d. per pound to 2s inclusive; eighty- four bales sold from 2s. to 3s. per pound, and nineteen bales sold from 3s. to 4s.^

59Sydney Gazette, January 4, 1822. 60 J. Bigge, Report of the Commissioner of Inquiry into the State of the Colony of New South Wales. (London, 1822), p. 446. 61

These prices were better than those at the next sale for then of the '217 bales of wool imported from Van Diemen's Land and New South Wales, 108 bales sold from 7d. to Is. per pound; 101 bales from Is. to 2s.; six at

2s. l^d. and two at 2s. 2d.'^

Such prices as these would barely cover costs. Wentworth calculated in 1820 that a flock of 330 ewes 'of the most improved breed' (i.e. merinos) and their lambs would produce in a year wool worth L199 17s. 5d. while the cost of shepherding, shearing and selling the wool would be L139 8s. 2d., so giving a net return on the wool of L60 9s. 3d. For a flock of 330 ewes of the 'coarser sort of sheep' the 'value' of a year's shearing would be

L96 19s. lOd., and the costs L136 9s. 4d. so that there would be a loss of 62 L39 9s. 6d. in producing wool of this type. These calculations were based however on the assumption that growers would receive four shillings per pound for fine wool and 2s. Id. per pound for corse wool, yet from

1818 till 1821 the average price John Macarthur received for his wool only once approached four shillings: no wonder he was shocked at Wentworth's

'delusive statements respecting the profits of breeding from fine-woolled 6 3 sheep/'. Coarse wool production which in Wentworth's calculations was decidedly unprofitable would have been even more so, for coarse wool was being sold in London at about two-thirds of the price Wentworth used in his estimates.

Taking the details Wfentworth used in arriving at his estimates it is

Ibid 62 W. C. Wentworth, A Statistical, Historical and Political Description of New South Wales, (London, 1820), p. 446.

Macarthur Papers, Vol. 3, Mitchell Library. 62 possible to indicate the approximate costs of producing wool in the late

Macquarie period. Wentworth states that one shepherd was given charge of a flock of about 350 sheep, which, if fine-woolled would produce between

750 and 875 pounds of wool. The annual cost of hurdles would be L40, of a shepherd L50, and shearing the sheep would cost sixpence each--in

Wentworth's estimates. For a flock of 350 sheep producing 875 pounds of wool these costs would average out at about pence per pound of wool produced, to which must be added the cost of fright, insurance, selling

64- commission, etc which would add up to another 7^d. to 9^d. per pound.

Allowing for the fact that local costs were paid in 'currency' would reduce the local cost component of total costs by say twenty per cent, so that the local producer would need to receive 2s.6d. per pound for his wool in

England if his basic current costs were to be met. Less than a quarter of the New South Wales wool sold in London in 1821 fetched above this price, and in 1820 Macarthur's wool had fetched on average just over this price. As coars« the prices obtained for New South Wales^wool declined from 1818 it must have become more than obvious to local producers that only fine wool could cover the costs involved in its production and despatch to London, and it was this realization which created interest in the use of merinos for breeding, the 65 feature so much commented on in 1820 and 1821. The initial development of wool exports had been in terms of coarse wool, but the changed price level in the English market from 1818 made colonists see their destiny in terms of fine wool.

64 Bigge gives the figure 9^d. in his first report (p. 162). Data is the Macarthur Papers (Vol 69) suggests the lower figure of 7^d. per pound. 65 Wentworth, op. cit, p. 146. 63

In 1820 Blaxland asserted that fine wool production would 'give to the colony a national character, increase its credit and raise it in the estimation of the world, and assist to convert what is now a burthen into 6 6 a creditable useful appendage to the Mother Country.' Wentworth put forward a case for the promotion of fine wool by arguing that 'it is only

. . . by encouraging the growth of exports until they rise to a level with imports, that J.t /New'South Wales7can be converted from an unproductive and 67 ruinous dependency into a profitable and important appendage.1 Eagar, in the letter he sent to Bigge in October, 1819, advocated the furthering of the production of fine wool, describing it as 'the Great Staple of the Colony,' stating that it was the only 'colonial production . . . which finds and 68 continues to find the best and surest Market.' It is hardly surprising that Bigge confronted by such unequivocal claims by colonists should espouse the cause of wool. 'The growth of fine wool,' he wrote, 'is the principal, if not the only source of productive industry within the colony, from which the settlers can dervice the means of repaying the advances made to them from the mother country or supplying their own demands for articles of foreign 69 manufacture,' though this was not the only advantage he sawin the increase of fine wool production, for it would also be to the government's benefit.

If it were not encouraged, settlers would not be able to profitably employ convicts so that the government would have to retain many in its employ

Bonwick Transcripts, Box 26, Mitchell Library.

fii 7 Wentworth, op. cit., pp. 319-20. 68 Bonwick Transcripts, Box 19, Mitchell Library. 69 Bigge, Report on Agriculture, p. 18 64 feeding them with food bought from local suppliers, the purchases of which would encourage agriculture, at the expense of pastoral farming. If fine wool production were encouraged, since it had a far larger potential market than that of local agriculture, settlers would be able to absorb large quantities of convict labour so relieving the government of the expense of the upkeep of the convicts.^ Furthermore the solitary life of a shepherd far removed from urban concentrations and the temptations found only in towns, would hasten the rehabilitation of the felons. To Bigge the promotion of fine wool production would advance the colony towards the time when it no longer was economically dependent on British government expenditure.

There were many expressions of regret that the development of fine wool production had been so slow. Bigge felt that it was due to a lack of enter­ prise on the part of most colonists, and the failure of the government to encourage its development. Blaxland thought that the main factor was a lack of individual enterprise, and so advocated the formation of a public company, the prospectus of which, issued in 1819, suggested that the methods of manag­ ing merino sheep used in Spain, 'as described by Sir Joseph Banks in the

Annual Register for 1809,' would be the best way of depasturing sheep on the land across the Blue Mountains. Wentworth blamed the government, for it had failed to direct the attention of sheep owners to the advantages of fine wool production.^ Eagar put forward what was then the more usual explanat­ ion, claiming that Governor Macquarie, acting on 'instructions from home,' had granted land for pastoral occupation 'with the most sparing hand.'

^Bigge, Report on the Colony, p. 163.

^Bonwick Transcripts, Box 17, Mitchell Library. 65

He wrote:

Every man was kept as much as possible within his own boundaries. Government published many orders forbidding the settlers to Depasture their Cattle on what was called the property of the Crown, and in the years of Drought when our sheep and cattle were actually starving by hundreds for want of Food, not an Individual would be permitted to Drive his Cattle beyond his own limits or to touch a single Blade of the Grass of the many Millions of acres of Government Land which was going to waste ... If instead of such a system, Land had been freely and largely granted, and every facility afforded the Grazier to feed his Herds and Flocks, instead of. . . 210,000 sheep now in New South Wales and Van Diemen's Land ... we would have had above 1,400,000. ' c

Eagar was flamboyant in his reckoning and oversimplified issues in his suggestion that a shortage of pasture had severely retarded the growth of the number of livestock, and hence by implication, the increase in the production of fine wool. Certainly if the rate of increase in sheep numbers such as was experienced between 1800 and 1808 had been maintained till 1821, the number of sheep in New South Wales would have been nearly four times the number that it actually was, yet if the rate of increase that prevailed between 1808 and 1813 had been maintained the number of sheep in 1821 would 73 have been less than double what it was. Both of these rates of increase had been obtained by the widespread use of coarse woolled rams in breeding, and this rate of increase was far in excess of that obtained when merino rams were used, so that while the restrictions on the use of pasture may have restricted the growth of sheep numbers, and while it may have led to the death of many sheep denied the use of pastures during the drought years 1814 and

1815, its effect on the growth in the number of fine woolled sheep was of little account. In any case, to suggest that shortage of

72 Bonwick Transcripts, Box 19, Mitchell Library.

See Figure 1. 66

Figure 1

Number of"Sheeft in New South Wales

1800-21.

150 -

100 -

20 --

10 -

1800 1810 1815 1820

Source: HRA Series I Vols. 7-10 passim; Bigge Appendix Vol. 123. 67 pastures which limited the growth of sheep numbers and hence wool exports in the Macquarie period assumes that there would have been sufficient labour to shepherd the flocks if sheep numbers had continued to grow as rapidly as they had in the previous decade, and that sheep owners wanted such a rate of increase, i.e., that they wished to continue to breed from the faster- multiplying inferior woolled sheep. Some part of the decline in the rate of growth in sheep numbers during the Macquarie period can be attributed to the efforts of some of the sheep owners to improve the quality of the wool they produced by breeding with improved strains of sheep.

The diffusion of interest in fine wool production had been slow.

Between 1803 and 1812 it had been retarded primarily by the availability of other more readily exploitable sources of export income with which the colony's import bill could be paid, so that even John Macarthur, the most ardent advocate of fine wool, sought his income in the colony's trading complex involving sandalwood and seals. After 1812, when Marsden's success and a shortage of export earnings aroused interest in wool exports, it was found that non-fine grades of wool could be sold in the.English market at remunerative prices and this did not induce any significant increase in interest in fine wool production. It was only when the prices in the

English market began to decline around 1818 that colonial producers were forced to see fine wool as the type of wool which had to be exported and interest in its production increased. Even so the conversion of this interest into production was limited by the availability of merino rams, and in this regard it must be remembered that in 1803, when Macarthur was making his claims, there w less than twenty pure merino rams in New South

Wales. The imports of improved types of sheep made during the first half of the eighteen tw^ties were designed to overcome what had been the main factor 68 limiting the growth of fine wool exports during the latter years of

Macquarie's administration.

While it was fine wool which around 1820 was seen as the main future export of New South Wales, it had been coarse wool which provided the bulk of the wool exported before 1821. The growth of these exports had been hindered before 1812 by the emphasis on fine wool, and it was only

Marsden's first-hand assessment of the market when he was in England which led to his despatching of his 'inferior' wool to England in 1812. Its success showed that wool of the type most readily produced in New South

Wales could find an export outlet, and exports continued despite the drought and despite the resultant shortage of pasture. The growth of these exports was not set, during the latter half of the Macquarie era, by the rate set by the capacity of the colony to produce wool, so much as by the need of merchants to export wool to help meet the cost of cargoes consigned to them by overseas suppliers. The increase in the volume of wool exported from

99,415 pounds in 1820 to 175,433 pounds in 1821 did not represent a sudden increase in the production of wool in New South Wales, but an attempt by merchants to defray part of the cost of the fc241,345 worth of imports uki<4\ received in 1820. Wool^ merchants had received from settlers in payment for merchandise represented the bulk of the 223 bales sold at low prices at the sale in August, 1821, and it was the despatch of this wool which led to the near-doubling of exports between 1820 and 1821. Nevertheless, in spite of the low prices for coarser grades of wool during the early eighteen twenties, ever larger quantities of wool were exported so that the export of the

175,433 pounds in 1821 marked the beginning of the export of these larger 69 quantities of wool from New South Wales.

While in this sense 1821 signified a coming of age of the wool industry, in other ways it was still in its minority. Wool exports reptesented but a small part of the export income of New South Wales in 1821, and wool was still regarded by colonists, primarily as a supplementary source of export earnings, for though much was spoken and writ­ ten of its future importance, actions did not match words. Wentworth estimated that wool production was worth £lly.977 in 1821, and that exports of sealskins, whale oil, hides, timber, coals, and sandalwood earned £.40,000: in the same year purchases of foodstuffs by the Sydney commissariat would have amounted to over £60,000. Wool earnings were therefore an insignificant source of export earnings in 1821, though it was recognized that wool was the only export capable of expansion, for the English market would absorb any quantity of wool New South Wales could supply, for it was a source politically under British control. In 1821

Britain imported over fifteen million pounds of wool from Spain and

Germany, sources subject to political vagaries, and Bigge was at pains to point out that wool could be shipped from New South Wales as cheaply as from these other nearer sources. The promotion of wool production in

New South Wales was as much in the interests of British manufacturers as of colonists; a fact colonists themselves well recognized. There was an assured market if colonial producers could produce wool of a degree of fineness comparable with that Spain and Germany exported to Britain. 70

Wool production was by 1821 a specialized form of farming in New South

Wales. The livestock musters for 1818 and 1819 (the only musters for the

Macquarie period which have survived) show that the number of persons owning sheep had declined since 1806 (the previous muster extant). In 1819, there were 136 owners of sheep in New South Wales: ninety-three with flocks of

less than five hundred; twenty-two with flocks of more than five hundred but less than one thousand; and twenty-one with flocks of more than one thousand. John Macarthur, Hassall, Cox, Terry, and Marsden were included in this last group, and their flocks totalled one-third of all the sheep in the colony. The other sixteen farmers with flocks of over a thousand, owned a further one-third of all the sheep, so that two-thirds of all the sheep were owned by twenty-one persons each with a flock of more than a thousand sheep. While there were 136 sheep-owners in 1819, there were over three hundred persons who owned cattle, but only four of those who owned large herds of cattle also owned large flocks of sheep. While a large proportion of those who had large numbers of cattle were emancipists, nearly all of those with large flocks of sheep were either former officers or free immigrants. This social and economic specialization meant that wool production had politically powerful advocates in the colony; advocates whose income depended primarily if not solely on returns from wool.

Their political ascendancy in the colony had allowed them to overcome what they considered to be the main obstacle which had hindered the growth of the wool industry during the latter half of the Macquarie decade, i.e.

Macquarie's refusal to allow ready access to the pastures outside the

Sydney Plain. The crossing of the Blue Mountains in 1813 had shown that 71 there were vast areas of pasture available for the colony's flocks and herds, but Governor Macquarie had stopped settlers from moving their live­ stock there till 1815 when some large graziers were allowed to send live­ stock but on a temporary basis. Drought conditions and the obvious over­ stocking of land in 1819 led Macquarie to permit more graziers to take up temporary pastures in the new areas, but when Bigge began to conduct his enquiry after his arrival in late-1819, he heard many complaints concerning the adverse effects of Macquarie's illiberality in granting premission for movement to the new pastures. Such complaints were exaggerated, nevertheless

Bigge was sympathetic and as he began to formulate his ideas on the future course of the colony it became more and more clear to him that access to these plentiful pastures were a requisite part of any designs which would put the colony on a more independent economic footing. In September, 1820, he wrote to Macquarie, 'every encouragement should be held out to those who passess sheep and cattle to repair to the grazing districts either at

Bathurst or in the New Country beyond the Cowpastures,' and went on to suggest that 'grants and purchases of land should be allowed at Bathurst and Argyle^'.

Macquarie could not contemplate this radical change but did, in a Government and General Order in November, 1820, permit 'such settlers, as are possessed of Herds or Flocks, to . . . send them for a time to be hereafter limited to depasture the fertile Tracts of the New Country.' Occupation was to be temporary, but 'the publication of this Order on November 25, 1820, marked the real beginning of the great outward spread of pastoralists and graziers 72 74 which continued into the thirties and forties/' -

By 1821 the wool industry in New South Wales was institutionally well equipped. There were the pastures made available by the Order of November,

1820, and a market in Britain capable of absorbing any quantity of fine wool the colony could produce within the foreseeable future. The only limit­ ations on the colony's capacity to exploit that market were (1) the number of fine wool sheep in the colony (which Wentworth estimated totalled ten thousand, or one in ten of its sheep, in 1820); and (2) the interest colonial producers manifested in the production of fine wool. The changes of the past few years had led colonists to believe by 1821 that fine wool was the only means by which New South Wales could progress; what remained was for them to be convinced that it was the means by which it must progress, and this it is suggested, came with the accession of Governor Brisbane.

74 T. M. Perry, Australia's First Frontier, (Melbourne* 1963), p. 33. PART II

THE PASTORAL ECONOMY, 1822-1851 73

CHAPTER III

The Wool Industry 1822=51 A Survey

The different prices realized at London sales for various types of Australian wool and the inadequacy of the volume of the Treasury Bills drawn in the colony,in terms of the swelling tide of imports, had kindled

interest in fine wool production during the last years of Governor

Macquarie's administration. Thereafter the amount of Treasury Bills drawn each year continued to increase till 1822 when it was L229,826,

then in 1823 the amount drawn was reduced to L95,828, and though it rose

in the subsequent year to L199,112, the decline in 1823 was, in that year, regarded by colonists as signifying the institution of measures advocated by Commissioner Bigge to reduce the expense of the colony. The

President of the Agricultural Society in the society's 'First Anniversary

Address,' which he delivered in July, 1823, spoke of how events during the preceding year had fulfilled the predictions concerning government expend­ iture made in its prospectus issued in 1822, and went on to suggest that while Van Diemen's Land had advantages for producing the grain required by the government, the 'unbounded extent of grazing land' in New South Wales gave it advantages for pastoral production, and therefore concluded, 'What we have to look out for now is the importation of free settlers, and the 74 exportation of fine wool. Nothing else will keep us in prosperity.’

Simultaneous with, but arising from different causes from intensifi­ cation of colonial interest in fine wool production, there was in the early eighteen twenties an upsurge of interest in England in the potential of the Australian colonies for this production. This was manifested not only in the spate of applications of would-be immigrants seeking land grants on which to establish themselves as graziers, but also in the formation in London in 1824 of the Australian Agricultural Company. Its prospectus referred to the evidence Commissioner Bigge's Reports (published in London in 1822 and 1823) presented concerning the advantages New South Wales offered for fine wool production; the rapidity with which fine wool pro­ duction had been developed in Germany; and the advantages Britain would enjoy if she were able to obtain the raw material for her woollen manufact­ uring industry from a source, such as New South Wales, not subject to 2 political changes. Though the enunciated objects of the company included

'the cultivation of the olive, vine, and such other productions as might be adapted to the soil and climate,' it was wool production to which particular reference was made and particular attention subsequently paid.

The address was printed in the first annual report of the Agricultural Society published in Sydney in 1823. For a similar comment, see HRA Series I Vol. xii, pp. 507-10.

o The prospectus was reprinted in the Annual Report of the Australian Agricultural Company (London, 1825). 75

The establishment in the mid-twenties of the Australian Agricultural

Company for operation in New South Wales and the Van Diemen's Land Company for the other colony, increased public interest in Britain in the Australian colonies. When the Australian Agricultural Company began operations in New

South Wales it gave rise in Sydney to what J. D. Lang called 'the sheep and cattle mania - a species of madness; which had the effect of attracting everybody to the 'cattle-market.,'

barristers and attorneys, military officers of every rank and civilians of every department, clergymen and medical men, merchants, settlers, and dealers in general, were seen prominently mingled together every Thursday, and outbidding each other in the most determined manner, either in their own persons or by proxies of certified agricultural character, for the purchase of every scabbed sheep or scarecrow horse or buffalo-cow that was offered for sale in the colony. In short, it was universally allowed that the calculations of the projectors of the Agricultural Company could not possibly be inaccurate. Their statements and reasonings were supported by arithmetical--which every person allowed were best of all--arguments; and it was made clear to the comprehension of stupidity itself, that the owner of a certain number of sheep and cattle in New South Wales, must, in a certain number of years, in­ fallibly make an independent fortune.^

Before this 'mania' gripped the colony in 1826, the intensified interest in fine wool production had been evinced in imports of merinos and Saxony sheep, some of which were brought by immigrants; some were consigned to

New South Wales for sale; some came as a result of orders from New South

Wales; and some were brought back by returning colonists. The Sydney

Gazette on November 29, 1822, reported the arrival of thirty-six merinos,

D. Lang, An Historical and Statistical Account of New South Wales (London, 1875), Vol. I, pp. 198-9. 76 and on July 31, 1823, of forty-one merinos, while The Australian of

April 7, 1824, announced the arrival of twenty Saxon sheep and an un­ specified number of pure merino sheep (possibly the property of Captain 4 John Pike). In April, 1825, Richard Jones returned to Sydney with over one hundred Saxon sheep obtained for him in Germany by C. W. Roemer in 1824, and though Roemer had claimed in May, 1824, that ’it is expected that the export of sheep from Germany will soon be made more difficult,3”* Alexander

Riley managed to obtain two hundred sheep from Saxony early in 1825 and returned to New South Wales with them at the beginning of 1826.

The introduction of Saxon sheep into New South Wales reflected the growing importance of Germany as a supplier of wool to Britain. Whereas in 1810 Germany had supplied seven per cent of the wool imported into Great

Britain, in 1815 she supplied twenty-three per cent, in 1820 fifty-two per cent, and in 1825^ sixty-six per cent^* As Alexander Riley explained, New

South Wales now had to compete with Saxony fine wools and only by introducing

Saxon sheep could it 'speedily eclipse the German, as it has already success­ fully vied with the Spanish Wools^'7 Nevertheless some colonists favoured

Spanish-breed merinos: Icely and Coghill returned late in 1825 with over

- ■ ■ T. Coghlan, Labour and Industry in Australia (London, 1918) Vol. I, p. 252, states that it was Captain John Piper. This is an error just as is his reference to Ridley where it should be Riley.

^Collaroy Station Papers, Mitchell Library, Sydney.

Derived from figures given by R. M. Martin, History of the British Colonies, (London, 1834) Vol. IV, p. 360.

7HRA, Series I, Vol. xii, p. 25. 77

150 they had obtained in Britain; while in August/ 1825, over fifty, bought in England for the Stock Club of the local Agricultural Society, arrived in

Sydney; and in November^ 1825, the Australian Agricultural Company landed

702 merinos obtained from flocks in France descended from sheep Napoleon had taken from Spaing

Interest in fine wool production was high in 1826 when the President of the Agricultural Society reported in his annual address for that year;

Our staple export wool increases, as well as improves in quality annually; the latter can be best accounted for by the anxious readiness with which proprietors give from L20 to L34 per head for imported merino tups, and L70 and upwards for Saxon rams; the improving advantages of the fleece from such spirited competition must tend to raise higher and higher the character of Australian wool in the British market.^

These high prices given for sheep in Sydney in 1826 may have partly reflected the desire of colonial sheep-breeders to improve the quality of their fleece, as the Agricultural Society President claimed, but they also partly reflected colonists' efforts to profit from the 'demand by numerous new settlers and the expected demands of the Australian Agricultural Company.

Interest in improving wool increased prior to 1826 though stationary or declining prices for New South Wales wool prevailed in the British market.

Evidence concerning the behaviour of such prices during the first half of the eighteen twenties is fragmentary. One series is given by P. Cunningham in

See the company's annual report for 1827. 9 The address is printed in the 1826 Report of the Agricultural Society.

^P. Cunningham, Two Years in New South Wales (London, 1828), p. 263. See also Anon., "The Affairs of New South Wales," The New South Wales Magazine (Sydney, 1843), p. 244. 78 his book, Two Years in New South Males where he gives details of 11 the

annual exportation of one of our most eminent wool growers,' whom he does

not name, but who was undoubtedly Hannibal Macarthur.^ The prices

Hannibal Macarthur received for his wool--whose quality had been improved

by breeding with merinos from John Macarthur1s flocks--were as follows;

TABLE 5.

Prices Received at London Auctions by H. Macarthur

1821-25

Range of Prices Average Price Quantity Sold

1821 2s.5d. - 2s.lid. 2s.lOd. 2,355 lb. 1822 (the ship conveying the wool to London was wrecked) 1823 Is.lid . - 2 s.4d . 2s.2d. 7,038 lb. 1824 2s.Id. - 5s.Od. 2s.8^d. 9,273 lb. 1825 Is.6d. - 2s.5d. Is.9d. 12,692 lb.

The prices Hannibal Macarthur obtained in 1823 and 1824 are comparable

with those given in the Sydney Gazette on February 5, 1824, when it reported

that at auctions held in London in mid-1823 New South Wales wool had fetched

prices around 2s.3d. with some lots fetching 4s.Id. and a few 7s.0d.; and on

July 22, 1824, when it stated that wool of average quality had sold at the

beginning of 1824 for between 2s. and 2s.6d. per pound, and 'favourite brands'

^Cunningham, ££. cit., pp. 260-2. The prices Cunningham cites for 1821 were those obtained at the sale in August, 1821, by Hannibal Macarthur. This suggests it was he whom Cunningham was describing, and other statements Cunningham makes confirm this. 79 for between 3s. and 3s.6d. Of the 201 bales of New South Wales wool which were auctioned in London on July 21, 1824, sixteen sold for prices of 3s. or more per pound (the highest price being 7s.6d.) but, the Sydney Gazette reported on February 17, 1825, the bulk of the wool sold at prices of from

Is.3d. to 2s.7d. per pound. The prices Hannibal Macarthur received for his wool were therefore, above the average, but Cunningham explained that they resulted from the attention Hannibal Macarthur had recently devoted to the 12 improvement of his wool. In 1825 both the prices Macarthur obtained and those reported in the Sydney Gazette declined sharply to greatly increased

British imports of wool from Europe: those from Spain increased from

5,020,679 lb. in 1824 to 8,206,427 lb. in 1825; those from Germany from

15,412,275 to 28,799,661 lb. This increase resulted from the reduction in

1824 in the British duty on European wools which 'threw the English market 13 open to the whole world, and the consumption of wool was at once doubled.'

Many of those who gave evidence to the 1828 Select Committee on the

State of the British Wool Trade referred to the long-term decline in British wool prices between 1819 and 1828, attributing it to the growth in the labouring class's preference for cotton; explaining it as part of the decline in the general level of prices; or pointing to the change in con­ sumer tastes whereby there was an increased demand for softer wools. The changes being made in New South Wales would allow it to meet this growing demand for softer wools, while it was universally acknowledged that the

_ Cunningham, op. cit., p. 262. ^Coghlan, ££. cit. Vol. I, p. 253. 80 colony's climate gave it an advantage for the production of fine wool, for whereas in Germany a superior fineness could only be achieved by housing the sheep and keeping the fleece covered, in New South Wales fleeces improved without such costly artificial aids. Colonists looked forward to the time when these natural advantages would allow them to triumph in the British market, in the meantime they had to "accelerate the improvement of fleeces" 14 if they were going "to put down foreign competition."

Such improvements as were necessary had to be made in spite of decreasing wool prices. They were facilitated however by the buoyant market for live­ stock in the colony arising from the inflow of immigrants, and by the ready availability of capital. Concerning the livestock market, Robert Dawson, the first manager for the Australian Agricultural Company, wrote in 1831,

The original owners of sheep in the colony, till very recently, found a ready market in the newly arrived emigrants for all their aged, culled, and diseased ewes ... If one of these original settlers, who so long blew the trumpet, and talked of profits, which, if they ever did exist, have long since gone by, were honestly to show a return of his flocks for 1825 and the two following years, when the extensive demand enabled him to sell off all his rubbish, and compare this return with the three succeeding years, when his sales ceased, and his old and diseased ewes died on his hands, or were slaughtered for the dogs; such an exposure of the real progress of increase and decrease in a given time, would best serve to enlighten the emigrant on this important subject.

Dawson's strictures upon the misleading claims made by the "original

settlers" and their sales of livestock to newly-arrived settlers were no doubt

Cunningham, 0£. cit. , p. 265.

^R. Dawson, The Present State of Australia (London, 1831), pp, 418-9. For similar comments concerning the sale of old stock to new settlers, see J. Henderson, Observations on the Colonies of New South Wales and Van Diemen’s Land, (Calcutta, 1832) pp. 41-2, and J. C. Byrne, Twelve Years' Wanderings in the British Colonies (London, 1848), Vol I, p. 195. 81 prompted by his dealings with the Macarthur family whom he had accused of selling him aged and useless sheep. If Dawson is correct, such profits as were made in sheep-farming# during the first half of the eighteen twenties resulted from the sales of sheep to immigrants by the "original owners" whose false claims concerning the profitability of sheep-farming had attracted the immigrants. This suggestion of a virtual conspiracy appears at first sight to be preposterous: an attempt by Dawson to malign those who had brought about his dismissal from the Australian Agricultural Company, but at the same time it is not without some substance. The prices obtained for the bulk of the wool exported from New South Wales during the eighteen twenties would barely, if at all, have covered its costs of production and marketing. On the other hand the sale of livestock at prices inflated by the demand created by the influx of immigrants and by the expectation of the continuance of this inflow, provided handsome returns for many years for graziers already established in the colony. To the extent that improvements designed to increase the colony's ability to compete with European wools were financed by a ploughing-back of

profits, this was possible because of these livestock sales, while capital

was readily available prior to 1826, though borrowing involved the inter­

position of a Sydney merchant between the bank (the only one then being the

Bank of New South Wales) and the settler, and this made the settler suscept­

ible to pressures on the commercial sector as well as those which operated 16 through the markets for wool and livestock.

See S. J. Butlin, Foundations of the Australian Monetary System, 1788- 1851, (Melbourne, 1953), pp. 508-9. 82

TABLE 6

The Marketing of New South Wales Wool

Small and Large Medium Growers Growers

Retailers or Small Merchants

English Large Merchants or English Agent s Merchant Growers Agents i i English Houses. i London Auctions

Yorkshire West of England

Staplers and Manufacturers

The arrangements for the financing and marketing of wool in New South

Wales in the eighteen twenties formed a coherent system with the large Sydney merchants as its nucleus. The system was similar in most respects to that then 17 prevailing in Van Diemen's Land, and the diagram R. M. Hartwell used to illus­ trate that system might be used as the basis of a description of the New South

Wales system*, (Provision must be made for the direct forwarding of wool to

English agents by large growers in New South Wales: a flow not allowed for in Hartwell's diagram.) Those growers who combined mercantile activities with sheep-farming, or who had done so in the past, generally consigned their wool directly to an English agent, while it was those who had established themselves as graziers during the early eighteen twenties who generally sold their wool

^R. M. Hartwell, The Economic Development of Van Diemen's Land, 1820-1850 (Melbourne, 1954) p. 123. 83 or consigned it through the intermediary of one of the large Sydney merchants.

The long-established growers and the merchants controlled the Bank of New South

Wales - thfc source of funds for pastoralists - so that while wool flowed from growers to merchants to England, capital flowed in the reverse direction. This made settlers very dependent on merchants, who if pressed to reduce their in­ debtedness by their overseas suppliers in turn pressed their settler-debtors; a process which was very evident in the depression of the early eighteen forties and during the latter half of the eighteen twenties.

1826, the year of the "sheep and cattle mania11, was a year of crisis for the Sydney mercantile community. The "embarrassment" of the Bank of New South

Wales in May led the government to grant it a credit of £.20,000, but the bank s unwillingness to draw upon this, together with large consignments of imports which continued to arrive from overseas (particularly China) meant that Sydney merchants were embarrassed by the "insufficiency of the circulating medium".

Their newly-formed Chamber of Commerce made a submission to the government in

August,1826, which, inter alia, suggested that "the internal consumption and the consequent energies of the industrious Settler" could be "abridged" unless the 18 government assisted the "commercial body". Several retail traders became insolvent when they were unable to meet their debts to merchants for merchandise they were unable to sell at a renumerating price^for the price of imports had continued to fall as a result of the continued addition of imports to an already

^HRA Series I, Vol. xii, pp. 507-10. 84 well-stocked market. However, the effects of this crisis did not spread to

the grazing interests, possibly because of measures implemented by Governor

Darling to overcome the shortage of coin in the colony, so that interest in

wool production remained high and the industry buoyant.

Governor Darling in a report on the state of the colony in the latter half of 1827 wrote concerning the wool industry:

Grazing... /is/the favourite pursuit. The unlimited extent of un­ granted Land, the abundance and goodness of the Natural Grasses, and the favourable nature of the Climate for the production of Wool, added to the comparatively higher proportion of labour and expense essential to the cultivation of the Soil, have Naturally attracted a great Majority of the Capital and intelligence in the Colony to Grazing. The exertions to improve the quality of the Wool during the last Year have been fully evinced by Several Importations of Saxon and Merino sheep, the general eagerness with which these and the offspring of fine Woolled Sheep prev­ iously imported have been purchased as well as the superior prices which Sheep of an improved Breed have commanded.

On the subject of the adaptation of this Colony for producing fine Wool, there is now only one opinion, and the increased activity of the Spirit of improvement in this pursuit leaves nothing to be desired. The recent introduction of the finest description of Saxon Sheep, both by the "Australian Agricultural Company" and private Individuals, has afforded such gratifying prospects of success as to leave little doubt that the Wool of the Colony will be at no distant day rival if^ot surpass in quality the produce of any other Country in this respect.

The bases of the prosperity of the wool industry were however being eroded.

J. D. Lang, using a reversed form of Malthusian theory, suggested that even if

good seasons had continued the prices of livestock were bound to fall because,

It was evident, indeed, to every person of understanding, that, as cattle, and sheep, and horses must increase in a geometrical ratio in a country so admirably adapted for the rearing of agricultural stock as New South Wales, ... the population of the colony could increase only in an arithmetical, -

19 Ibid., Vol. xiv, p. 143. 85

a time must arrive, sooner or later, when their numbers would so far exceed those of man that the price of them must fall prodigiously.

But the increase in the number of sheep would not necessarily of itself have led to a decrease in their price, rather, as Robert Dawson pointed out, the original settlers had had a virtual monopoly of livestock sales>but towards the end of the eighteen twenties they found "in every part of the colony other settlers /who7 can compete with them, and /who7 can supply the newly arrived emigrants with young sheep of a better quality, and at one fourth of the price 21 which was demanded only a few years since for those which were old and unsound'.'

This was one way in which the profitability of sheep-farming was being reduced, and there were two additional factors which were decreasing the profits of sheep farming, to the distress of the colony in general. John Macarthur identified them in December 1828 as being, "the successive seasons of drought", 22 and "the reduction in the value of wool in the mother country." Concerning the former J. D. Lang had noted with some Calvinistic satisfaction that, "It pleased Divine Providence... to visit the colony . . . with an afflictive drought of nearly three years' continuance", and though, in spite of the drought, the number of sheep "increased in number very rapidly," due to former follies 23 which had led them into indebtedness, many graziers were ruined.

From 1828 till 1830 there were recurring references to the difficulties wool-producers faced because of the continued fall in wool prices and the drought which had begun in 1827. The nature of these difficulties and wool-

20 Lang, op. cit., Vol. I, p. 201. 21 Dawson, op. cit♦, p. 418.

^hra, Series I, Vol. xiv, pp. 552-3. 23 Lang, op. cit., Vol. I, pp. 201-2. 86 growers' reactions to them during these years can be followed in the annual reports of the Agricultural Society. In his 1828 report, the President pointed out that at an auction in London in October 1827, of eighty-seven bales of Australian wool, eighty had sold at prices of between Is. and

Is. 2^d. per pound while one bale of very fine wool had fetched 5s.; 237 bales of German wool had sold at between Is. and 2s. 2d.; and ninety-three bales of Spanish wool at between 8^d. and 2s. Id. The lesson to be learned from these prices was clear, - "we must not be discouraged, but persevere in our improvement, with the certain prospect of improving our staple." However, such prices as were being generally obtained would not cover the costs of those

"proprietors who run their flocks on distant tracks in the interior, where the expense of washing, shearing, sorting, packing and carting wool to Sydney, becomes so serious." The Presidential report in 1829 again dwelt on the effects of drought and low wool prices which, to try to counteract, some graziers had imported during the preceding year six to seven hundred Saxon sheep and a

"considerable number" of merinos, hoping that "commensurate prices would continue to be given in England for the rapidly improving quality of our export staple." The 1830 report contained some optimistic parts for there had been some rain in autumn; sheep numbers were increasing rapidly, though this meant that it had become difficult to obtain sufficient shepherds; and while wool prices were still unprofitable, the President pointed out that German and Spanish growers had also suffered, in fact, "in a greater degree than . . . the Australian growers, as the foreigners artificially rear their flocks at an expense from which our cheap pasturage and suitable mildness of climate 87 relieve us."'

Earlier in 1830, 192 "Landed Proprietors" had submitted a petition

"praying for a reduction of the Duties on Tobacco (imported into Britain) to one third of the present amount'^ to Governor Darling, for forwarding to

25 the Secretary of State. It began by referring to the early years in the colony's history when the attention of the settlers was directed solely "to the Growth of Wheat and other Grain for the Supply of Food for the Convicts and to the Breeding and Rearing of Livestock," and continued:

The Growth of Grain has been found unprofitable, as well as uncertain, the remote situation of the Colony precluding it from the Advantage of a Foreign Market . . .

Breeding and Rearing of Stock have hitherto been attended with more success, and our Wools have met a steady Sale in the Market of the Mother Country.

Cattle and Sheep, have, however, now increased beyond the Consumption of the Population, and Contracts for Meat have been completed at One penny and one eighth per Pound, whilst our most improved Wools have scacci fy reached a renumerating Price.

Three Seasons of unprecedented Drought have conspired with other Causes to produce much Distress and to occasion great depression throughout the Colony. Unfavourable Seasons being common to every other Country in the World as well as to our own; the above fact is not dwelt upon further than to show that even when plenty succeeds to our present state of want, the Difficulties of the Settlers will not cease under the existing Commercial Circumstances of the Colony with regard to its Exports.

The present appears to be a Crisis of much importance to the Colony It is of necessity changing the Direction of its Industry from Pastoral to Agricultural Pursuits; but it needs the Fostering Hand of the Mother Country to aid in the Development of its Resources. . . With this view,

24 See also T. Betts, An Account of the Colony of Van Diemen s Land, (Calcutta, 1830) p. 79.

2~*HRA Series I, Vol. xv, pp. 340-4. 88

it will be necessary for some time to come that such Exportable Articles, as can be raised, be admitted to the Markets of England on payment of moderate Duties . . .

Our former Means of Industry appearing no longer available, we have been constrained to seek for other Sources of Profit; and none appears so obvious as those which would result from the Growth of Tobacco.

The petition proceeded to enumerate and discuss at length the advantages

New South Wales and Britain would gain from the promotion of a tobacco-growing

industry, including for New South Wales (undoubtedly inspired by the ideas

recently propounded by Wakefield) "a more concentrated Population and more

settled habits"; and for Great Britain, "the Increase in our Articles of

Export as a means of payment for the Goods she supplies" on consignment.

About this time (i.e. 1830) there were many "prophecies of ruin to New

South Wales; very few were those who ventured on the hardy assertion that 26 prosperous days would ever return." The prosperity of New South Wales

depended on the progress of sheep farming, and this in turn required a spread

of settlement, but as the petitioners pointed out, while tobacco could be grown

in coastal areas "visited with frequent rains", sheep farmers had to "spread

over immeasurable Tracts of Country in search of Food for their Stock; and the

Experience of these last Three Years has shown that Settlers in the Interior

will at times be subject to afflictive Droughts, and much uncertainity with

respect to their Means of Existence". The continued decline in wool prices

during the second half of the eighteen twenties meant that the higher costs

2 6 Anon., "The Affairs of New South Wales", The New South Wales Magazine (Sydney, 1843) p. 245. 89

involved in pasturing sheep at a distance from Sydney were not covered by

returns while the drought, which had for a time turned inland areas into a virtual desert acted as a further deterrent to geographic expansion. Sig­

nificantly, the new areas of land occupied in the first half of the eighteen

thirties, did not take the frontier of settlement further inland, so that while to the south-west of Sydney "settlement on the Murrumbidgee paused for

a time and, in the early thirties, there was a complete stocking of the country

to the rear," in the north, though the way to New England had been discovered

in 1827, "not until 1832 did the passage of stock ... to New England commence „ ,,27 in earnest.

Low wool prices and drought had checked the progress of the wool industry

in New South Wales during the years 1828-30. 'Property of all kinds became

depreciated to the lowest possible ebb. Executions were levied in prodigious numbers, and under their sales land and stock were miserably sacrificed . . . 28 About every second or third settler was insolvent." News of the conditions

prevailing in the colony checked the flow of monied immigrants wishing to establish themselves as pastoralists at a time when there were depressed con- 29 ditions in England.

1831 is usually regarded as the year which saw the turn in the colony's

fortunes, for in that year the drought broke and wool prices showed signs of

recovery from the low point they had reached in 1830, though their recovery was initially slow and halting. The colonists' reviving hopes would have been

2?S. H. Roberts, History of Australian Land Settlement (Melbourne, 1924) pp. 157, 160. 28 Anon. "The Affairs of New South Wales',' loc. cit. 29 Macarthur Papers, Vol. 35, Mitchell Library, Sydney. In a letter from London dated April 7, 1829, James Macarthur reported that gloomy news from New South Wales had stopped the flow of immigrants and capital to the colony. 90 somewhat dashed when they learned from a government notice published on

July 1, 1831, that no further land grants were to be made and that land was in future to be disposed of by auction with a reserve price of five shillings per acre, though this news was palliated by the provision in the new regulations for the leasing of land at a minimum rental of twenty shillings for 640 acres,

There were favourable seasons in the colony for a number of years after 1831, while in England the wool trade revived in 1832, improved in 1833 and there- 30 after prospered till 1836. Wool prices improved with the revival of the

English industry and rose as that industry boomed, so that the prices received for New South Wales wool in the mid-eighteen thirties were later spoken of as being the highest for the period 1822-51.

By 1834 the colony was again on a prosperous footing. Witnesses appear­ ing before the Legislative Council Committee which in that year investigated the question of the applicability of English usury laws to New South Wales, reported that the imposition of English usury laws setting the maximum rate of interest in the colony at five per cent would check the influx of British capital and consequently retard the progress of the colony. All the witnesses suggested that higher rates of interest (either eight or ten per cent) could be 31 readily paid by the commercial and agricultural interests in the colony.

Edward Curr, a prominent colonist later confirmed this, explaining that the colony "was in a good state about the year 1834 . . . the capital invested in the various colonial pursuits, mercantile, banking, pastoral and agricultural,

^R. C. 0. Matthews, A Study in Trade-Cvcle History (Cambridge, 1954), p. 154. 31 Votes and Proceedings of the Legislative Council; 1824-37. Report from Sub-Committee on the Interest Bill, 1834, pp. 187-96. 91

was sufficiently and fairly, but not excessively renumerated."

This prosperity was initiated by a surge of immigrants and capital to

the colony when the depression lifted, a surge which grew as the thirties

progressed. T. B. Duggan in his Essay on Catarrh in Australian Sheep des­

cribed how the "enconiums" concerning the quality of Australian wool expressed

in evidence to the 1828 Select Committee on the State of the British Wool

Trade,

together with the high prices which were obtained for it, constituted facts which were enunciated throughout the Kingdom, and which were fully substantiated by private accounts of individual prosperity and success which were forwarded by parties in the Colony to their friends and relations in Great Britain.

These facts attracted the attention of the public to these colonies. Many men of broken fortunes, and others of moderate capital, looked to Australia as the most renumerative field for the investment of their means. Some of them wished to make it their adopted land, and to arrive simply at independence; but there were other enthusiastic individuals who had heard some exaggerated accounts of the prosperity of the country, and who imagined that a residence here as a sheep proprietor for ten or twelve years would ensure the realization of a fortune, with which they might return to their native land to pass the remainder of their days in ease and dignity. Deluded by these sanguine hopes, these unreasonable expectations, men from almost every grade of society emigrated to this Colony in the confidence of amassing wealth by sheep-farming - Animated with ardent hope, like the Argonauts of old, they sailed in bands for this modern Colchis, in search of the Golden Fleece.

The praise for Australian wool was for the finer grades just as were the high prices, supposedly the basis of many colonial fortunes. "In 1829 the best Australian wool sold at 2s. to 3s. per lb., inferior greasy wools at 6d.

to lOd., with intermediate qualities at proportionate prices. In 1831 the

32 Votes and Proceedings . . . : 1844 Vol. 2, p. 352. Curr made the statement in a submission to the Select Committee on Crown Land Grievances. 33 T. B. Duggan, Essay on Catarrh in Australian Sheep (Sydney, 1848) pp. 31-2. 92

average price of Australian wool in England was Is. Id. per lb., but the 34 best of the New South Wales wool fetched 3s. to 5s." But the high prices

were obtained for only a small fraction of the local wool sold in London, and

were for fleeces from sheep of improved breeds or in some cases for the

fleeces of pure-bred Saxon sheep. In 1831 when "the best wool" was fetching

3s. to 5s. per pound, the Australian Agricultural Company’s wool clip sold at

prices ranging between Is. 3d. and 2s. 4^d. per pound, the average price being

Is. 9d., and this was for wool from sheep bred from the French merinos and

Saxon sheep imported by the company. While the prices obtained for the

company's wool rose to an average of 2s. per pound in 1833 and 2s. 9d. in

1834, this was partly because of improvements in the quality of the fleece and partly because of an overall increase in prices obtained for Australian 35 wools. The new settler may have been beguiled by reports of the very high

prices obtained for wool but the prices he would initially realize were con­

siderably less renumerative, and possibly nearer "the prices obtained in

London for Australian wool of average quality which had been washed and rather

imperfectly freed from grease/' as shown in the official values used for

calculating the annual value of wool exports from New South Wales. These

34 Coghlan, ££. cit., Vol. I, p. 253. 35 The prices that Australian Company received for its wool were reported each year in its annual report. 36 Coghlan, ojd. cit., Vol. I, p. 504. Coghlan was quoting prices equi­ valent to the prices obtained when the value of wool exported each year is divided by the quantity exported, i.e. the official values used in computing the value of exports. It would appear from fragmentary sources in the State Archives of New South Wales, that the official value was established by taking a simple arithmetical mean of the prices obtained at the London sales, as re­ ported in the Sydney newspapers. Since the bulk of this wool would fit Coghlan3s description it seems justifiable. The official value for 1835 appears question­ able. There were no references to a marked decline in wool prices as compared to 1834, as suggested by this official price, though there were statements concerning some decline in the wool price in 1835. 93 were as follows:

TABLE 7

"Official" Wool Prices 1827-50

(Pence per pound)

1827 14.3 1833 14.4 1839 14.6 1845 13.9 1828 11.8 1834 22.8 1840 15.8 1846 14.9 1829 15.2 1835 18.5 1841 14.8 1847 13.6 1830 9.3 1836 24.0 1842 15.1 1848 13.0 1831 13.0 1837 18.0 1843 12.9 1849 10.6 1832 11.7 1838 17.0 1844 11.5 1850 12.0

The: changes in these official prices reflect the fluctuations in the overall price level for wool and in turn the fluctuations in the English woollen industry as it recovered and then boomed between 1832 and 1836 so the prices of Australian wool picked up and rose to very high levels.

/Then/ in Autumn 1836 there was a very sudden reverse, /in the manufacturing industry?. • • and for the next year trade was bad. There was a recovery in 1838, but towards the end of that year and in 1839 the home demand was weakened by the bad harvests, and this apparently more than offset the rise in exports /of woollen manufactures?. In 1840 . . . the trade as a whole was felt to be rather better off than in 1839. In 1841 there was a temp­ orary revival of exports . . ., but in that year and in 1842 business was none the less considered to be bad and getting worse.^

With the reversal in the prosperity of the manufacturing industry late in

1836 wool prices showed a marked decline which was partly responsible for a short-term crisis in New South Wales in the last quarter of 1837. The

Australian of September 19, 1837, reported that the price of sheep had fallen drastically as a consequence of news of the poor wool prices in .England, which

37 Matthews, ££. cit., p. 154. 94 showed, the editor claimed, that 'the former prices were a fictitious value." On October 10 The Australian further reported that the wool trade in England was experiencing the greatest stagnation it had ever known, and this news led C. W. Roemer, in a letter to Tfre Australian of October 17, to call on the government to make advances on any wool deposited in a store to be set up in Sydney where it was to be kept till prices improved. The situation during the last quarter of the year was described by The Colonist on December 18,

1837.

The financial embarrassments of the old world rolled their troubled waters to our distant shores, and spread agitation and alarm through­ out the colony. The local purchasers of last year's wools at two shillings and two and threepence a pound, received the astounding intelligence that instead of a profit they had sustained a woeful loss, even to the extent of eightpence to a shilling per pound. A blow so violent, and so utterly unexpected, caused many of our mercan­ tile houses to totter, and some of them to fall. Out* graziers, whom five or six years of uniform prosperity had flattered and spoiled, in a moment, found all their year's calculations baffled, and their income reduced full two-thirds below their most moderate expectations. The consequence has been, that the latter months of the passing year'have been more gloomy than any period since the disastrous times of 1829, 30 and 31.

The fall in wool prices was however only partly responsible for the crisis.

News of this decline came just after the government had begun to withdraw part of the funds received from land sales which it had deposited in Sydney banks, and pay them to overseas shipowners for bringing immigrants to the colony. 38 There withdrawals forced the banks to restrict lending for a time, which

38 T. H. Braim, A History of New South Wales, (London, 1846), Vol. I, p. 114. 95 combined with the arrival of news of depressed conditions in the English wool trade, precipitated the crisis, which as in 1826, affected only the trading community.

Wool prices continued to decline during the remainder of the eighteen thirties, but this in no way restricted the spread of pastoral settlement.

The initial crisis associated with news of the sudden fall in wool prices was short-lived, so that the Sydney Gazette could report on January 20, 1838, that prices received at a recent sale of sheep were good "when the depressed state of the money and wool markets are considered," while in July, 1838, a

London correspondent could report back to G. T. Savage in Sydney, that "Accounts from the colony are rather more cheering . . . the influx of Emigrants and 39 Capital was operating on the value of Property there." Besides these two factors - immigration and capital inflow - there was a third serving to bolster and inflate "the value of property"; a factor whose significance was recog­ nized by colonists, and one to which Edward Curr in his analysis of the developments during the latter half of the eighteen thirties ascribed much importance. He described how the planting of a settlement in South Australia in 1836 created a large demand for provisions, livestock, and building materials and how residents of the older colonies quickly took advantage of this market.

Consequently the price of sheep, among other things, rose, and "the price of all property ranged as if South Australia were to be a permanent market, in- 40 stead of a merely temporary one."

39 The letter was sent from Walker Bros, in London and is in the manuscript collection of the Mitchell Library. 40 See note 32. 96

Capital flowed into the colony during the latter years of the eighteen thirities at such a rate that the problem was to find means of absorbing it.

Immigrants with some command of capital continued to arrive, attracted by claims of the ready fortunes to be made in sheep-farming, while with the introduction of a scheme of large-scale assisted immigration the problems occasioned by a shortage of labour which had worried pastoralists for many years were thought to have passed. Optimism was further heightened by the prices inflated by the demand for livestock in South Australia. All three factors served to maintain the profitability of sheep-farming, and while ever there was a sufficient demand for sheep in South Australia or to stock new runs in New South Wales, the industry could remain profitable irrespective of the declining returns from wool sales.

The industry however contained the seeds of its own downfall; in the excellent prices received for ordinary grades of wool in the years 1834-6, and in the excellent prices received for sheep during the latter half of the eighteen thirties. Stizfelecki summed up the situation when he wrote:

Then came the extraordinary profits which the mere increase of the flock, and of the quantity of wool, realised. The state of the market, which in every country regulates the line of industry, chalked out a very simple one for the sheep-breeders of Australia. The greatest numerical amount of sheep being shown to lead immediately to the best of all possible results, the increase of the stock was promoted by all possible means, and the carrying out of the measure was left to the uncontrolled management of nature. Her bounty soon crowned the desire of the settlers, even beyond their expectations; but the concomitant conditions of the boon greatly modified its ad­ vantages .

'P. E Strzielecki, Physical Description of New South Wales and Van Diemen's Land (London, 1845), p. 368. 97

Wealth was estimated at this time, as T. B. Duggan commented, "not by the superior breeding and excellent constitution of their sheep, but by their numbers": an attitude which was thought by some to have arisen because of the ignorance of the principles of sheep-farming on the part of those who established themselves as pastoralists in the period 1835-40, when there was a "perfect mania" for sheep-farming^ ^ .tt caused "military officers, gentle­ men of the mercantile navy, lawyers, clergymen, merchants, and others who had 42 capital to invest, or credit to float a set of bills," to become sheep-farmers.

Consequently whereas, when pastoralists had been faced by declining wool prices in 1828-9 they had sought to extricate themselves by importing Saxon and merino sheep to improve the fleece quality and so gain the advantage of the higher prices for superior grades of wool, the only response of the pastoralists facing declining wool prices in the late 'thirties was to increase the quantity of wool produced without any attempt to improve it. This meant that as flocks were allowed to multiply the problem of finding sufficient shepherds became acute, while the need for more pasture as sheep numbers increased sent graziers ever farther afield.

A few colonists recognized the problems posed by the declining wool prices, and suggested remedies. An anonymous writer in The Australian Magazine in

January, 1838, stated:

Our wool growers must lay themselves out for the cheap production of a good material . . . They must be economical in their establish­ ments and style of living, and moderate in their expectations . . . they must read intelligent and judicious books on sheep-farming, and

^2 J. R. Graham, Treatise on the Australian Merino (Melbourne, 1870) p. 15. 98

the growth and raising of fine wool. And necessity, the mother of invention, must come in aid of their efforts, in directing them to expedients of management, by means of which they can do with less of the one, and abridge the other - we mean, of course, the land and the labour.

Such advice was however not heeded, and while the shortage of labour forced some minor adaptations on the industry (which are discussed in Chapter IV)^ by and large the quality of the fleece was allowed to suffer, leading to even lower earnings from wool. Nothing was done to curtail the rate of increase of sheep numbers and the industry continued with the same labour-intensive shepherding methods and by expanding over an ever wider area. But the quantity of labour could not and did not expand at the same rate as the number of sheep, while the quantity of suitable land was fixed. New immigrants soon discovered these limitations and duly reported them back to England even before they began to report the appearance of depressed conditions in the colony. 43 This can be seen in letters written by Samuel Rawson, the son of an influential Yorkshire wool merchant, John Rawson. Samuel had left school and begun training as a surveyor in 1837, but shortly afterwards his father decided to buy him a commission as an army officer. He took Samuel to London in early 1838, hoping to use his political connections to obtain one straightaway but learned that none were immediately available. While in London John Rawson met a ship's captain recently returned from New South Wales who spoke in such he glowing terms of the opportunities there that John" Rawoon decided to send his son to the colony immediately. Samuel left London fn the Florentia on March 31

The Rawson Papers are preserved in the Australian National Library, Canberra. 99 and arrived in Sydney on August 3, 1838, with introductions to Bishop Broughton, the Reverend Samuel Marsden, Alexander McLeay, and other leading colonists, and within a week had received an invitation to dine at Government House.

He quickly learned that the salaries paid to surveyors were low in com­ parison to the cost of living in Sydney - one of "the most expensive places in the world" to live - so in the first letter he sent to his father from

Sydney, written two weeks after his arrival, Samuel reported, "from what in­ formation I have obtained here, I think sheep-farming is the best business and the quickest way of making money." On the advice of some of the prominent colonists whom he had met as a result of his letters of introduction, Samuel decided to take an unpaid job on a sheep station at Braidwood (in the south of New South Wales) for six months so as to "get some information in the way of managing sheep" before starting out on his own. His next letter, dated

November 1838, was from Braidwood, and in it he informed his father, that he had been advised,

to settle as soon as possible in the country as a sheep-farmer, that being the most profitable thing in this money-making land and the life that will suit me best, it being most independent and all out-of-door work. Of course I cannot commence till I hear from you, as notwith­ standing what people say in England a person cannot commence even here without funds, and every year as settlers increase, the land gets dearer and the profits less . . . When a person wants to buy land he fixes on a piece that he likes and then acquaints the government surveyor who has it measured and puts it up for auction on a certain day. If nobody bids against you, you obtain it for five shillings per acre. Two or three sections /each of 640 acres?, a flock of 500 or 600 sheep, a team of working bullocks, a few cows and horses is considered a pretty fair start for a new beginner. This requires tl,500 to 1.2,000, sheep averaging from 30s. to 40s. per head.

Many people who live in England invest money in sheep in this country giving them in charge to a friend here, if they have one willing to take them. The person here is at the whole expense of keeping them and as re- 100

numeration receives one-third at the end of the time agreed upon - general seven or ten years - and also one third of the wool sold during this time ... I hope you will instil into some of the good people the advantage of investing in this way and get me a flock or two.

It is more necessary that I should settle soon as I see that they do not intend sending any more convicts out, which will at least double the expenses of a settler. Some people think it will be the ruin of the colony. . .

In two or three months I shall either try to get a place as a superintendent or else travel through the country to find a suitable place to settle in. Port Macquarie and Port Phillip are described as being the best places in the colony . . . The country at the back of the former is called New England and is said to be most beauti­ ful. It is a great advantage to be on the sea coast as the expense of land carriage is tremendous.

Rawson left Braidwood in January^ 1839, and returned to Sydney where he and a Mr. Jamieson formed a partnership to buy a cattle station at Port Phillip.

His experiences at Braidwood had erased some of his initial favourable opinions of Australia; as he explained in a letter written on his return to Sydney,

"the opinions in England regarding this country and its climate are most erro­ neous." His letters from this point contain forebodings intermingled with news of the huge profits being made with land speculations in Melbourne, and then from the end of 1840, references to the depressed circumstances of the colony. In July 1840 Samuel Rawson obtained a commission in the 28th

Regiment, which was then stationed in New South Wales^and so then left the management of the cattle station to his partner and took up duty with the regiment, but he retained a lively interest in the prospects the colony offered for making money.

In July/ 1839, he wrote complaining of how expensive everything had be­ come: the price of flour and tea had risen partly because of the drought which had continued for nearly two years, and partly because rumours of wars 101 in China and India had led colonists to believe that supplies from those sources would be cut off. To add to the colony's distress, "the catarrh had broken out among the sheep again, and in some districts they are dying in great numbers. People seem to think that the country now will never be clear of it, in which case it will not do keeping sheep." Nevertheless

Samuel Rawson continued to advise his father in the letters he sent during the following twelve months to send him an authority to buy land in Melbourne where large fortunes were being made by trafficking in land. The tone of his letters suddenly changed at the end of 1840: the one sent in September reported the favourable movement in the prices of land and livestock; one in December 1840, sent from Melbourne, reported,

Everything at present, both here and Sydney, is very dull on account of the scarcity of money. The merchants in Sydney are failing in all directions. There have been none of consequence here as yet, though nobody thinks of taking up their bills . . . Owing to the panic at present we are like everybody else - without money . . . However, I think the pressure is only temporary.

But the conditions persisted and worsened before Rawson left the colony with his regiment in July^ 1842. In a letter he wrote in March 1841 he told his father that the minimum price of land at government auctions had been in­ creased to El an acre (from 12s. per acre, the price set in 1839) and the land regulations altered to allow purchases to be made in England which "if the people in England rush in and buy land as they did in South Australia, will ruin half the settlers, as it will not pay feeding stock on land at El per acre." In February 1842 he reported that New South Wales was in a "horrid state" with the price of sheep down to "3s. 6d. with their wool on", about one tenth of the price of sheep in 1839 when he was considering becoming a sheep-farmer. 102

Samuel Rawson's letters contain nothing concerning the changes in the condition of the wool industry during the last years of the eighteen thirties and early years of the eighteen forties that was not contained in local newspapers, government documents and reports, etc. Their interest lies in that they show how news of the fluctuating fortunes of the Australian colonies was being relayed to England, in this case to a prominent and influential wool merchant and through him undoubtedly to many others interested in the colonies as a field for investment, a place for emigration, and a source of supplies of wool. From his son's letters John Rawson was able to discern - perhaps more clearly than his youthful son - the implications of the reaction of colonists to the decision to end convict transportation to New South Wales; of the havoc among flocks caused by catarrh and drought; of the adverse effects expected from the decision to increase the price of land and alter the system of land sales; of the declining profits of sheep-farming; and of the news in December^ 1840, of the failures among Sydney merchants which ushered in a period of depression, as more and more of those enmeshed in a web of credit succumbed.

The 1840 Committee on Immigration in its report to the Legislative Council in September of that year referred to the decline which had become evident in early 1840 in England in "the disposition to emigrate to New South Wales" which, the Committee felt, stemmed principally from "reports, with which the

English newspapers have teemed, respecting the severe and long-continued 44 drought in the Colony*", This falling-off in immigration intensified the

44 Votes and Proceedings . . . 1840, p. 325. Report from the Committee on Immigration p. 1. 103 difficulties already being experienced in the colony because of a shortage of labour: difficulties which had beset New South Wales in varying degrees of intensity throughout the eighteen thirties. Witnesses before the 1835

Committee on Immigration included several large stockowners, all of whom complained of the labour shortage, most concern being expressed regarding the

shortage of skilled workmen such as carpenters, blacksmiths, etc., and of agricultural labourers. The "Committee on Immigration, Indian and British,

into New South Wales" which took evidence in June and July 1837 heard several

large land and stock proprietors advocate the introduction of Indian coolies

to be employed as shepherds in order to overcome the pressing shortage of

labour. Hannibal Macarthur's evidence epitomizes the nature of the problem outlined by witnesses.

I am of the opinion that the progress of all improvements in the colony is greatly retarded, and the colonists much embarrassed in their undertakings, for want of a sufficient supply of mechanics and labourers . . . The influx of mechanics and labourers has not kept pace, by any means, with the great demand . . . extended, both by the annual increase of the flocks and herds, and the consequent activity of every branch of commerce connected with the importation of the supplies required by the colonists from England and Foreign countries.

The number of assisted immigrants arriving in New South Wales was 808

in 1836, 2,664 in 1837, thereafter increasing to 8,416 in 1839. It then

dropped to 6,637 in 1840, increased to 20,103 in 1841, and then dropped drastic­

ally and rapidly to 6,823 in 1842 and after the cessation of the assisted migration schemes to only 11 in 1843. About one-third of the immigrants

arriving each year were males over fourteen years of age, many of whom had

Votes and Proceedings 1824-37. p. 656. Evidence taken before Committee on Immigration. 104 had dependent families and as such were unattractive as employees for pastoral- ists. In spite of the increase in the arrival of immigrants between 1836 and 1839, pastoralists continued to complain of a shortage of labour, and to add to their woes the rumours they heard in 1838 of the British government's intention to end convict assignment were confirmed in the following year.

The coinciding in 1839 of drought conditions, declining wool prices, the confirmation of the intention to discontinue convict assignment, and the announcement of an increase in the minimum upset price for the sale of land 46 to 12s. per acre, produced "a general panic and dread of what would come next".

1840 proved worse for the number of immigrants arriving declined, and in mid-

1840 news arrived in Sydney of changes to be introduced in the system of sell­ ing crown land. The one that worried pastoralists most was the proposal that

"orders for the selection of such lands as the purchaser might on his arrival in the Colony be disposed to fix upon" should be sold in England at a fixed price per acre. This meant that if the land occupied by a settler holding a depasturing licence were chosen by a newcomer holding an order, the squatter would be dispossessed. The only solution which the 1840 Committee on Immigration could suggest was to give "the licenced occupier the right of pre-emption at the fixed price", i.e. El per acre, but this, as Samuel Rawson recognized, would have ruined many settlers for the returns on sheep were then too inadequate to 47 justify paying the El per acre involved.

46 Votes and Proceedings . . . 1840, p. 334. Report of Committee on Immigration. Evidence of P. L. Campbell, the Acting-Colonial Treasurer. 47 Ibid., p. 328. Report, p. 4. 105

A new sheep-farmer in 1840 was therefore faced by a far from encouraging situation. Wages were high because of the shortage of labour, while the costs of rations (which formed part of the payment to labour) were also high because of the drought. Convict assignment had ended and immigration had far from replaced the former flow of felons. There was no suitable unsold 48 land within the limits of location on which to depasture sheep, so any land required had to be bought at private sales at a time when there was considerable speculation in land, or occupied outside the limits of location where sheep could be depastured on Crown land by the payment of a licence fee of L10 per annum. The latter alternative involved however (i) an uncertainty of tenure, now made particularly uncertain by the new regulations allowing sales of colonial land in England; and (ii) considerable cost disadvantages, for the frontiers of settlement were now at a great distance from the metropolis. 49 In a despatch to Lord John Russell dated September 28, 1840, Governor

Gipps reported that the colony's "flocks and herds already stray over a country 900 miles long by 300 wide." Stations were to be found as far north as the country behind Moreton Bay, while "to the South and West, they extend behind Port Phillip to the boundaries of South Australia." There were two drawbacks to this expansion according to Qipps: (i) it had brought settlers into conflict with the aborigines, and (ii) it had taken settlement

A Q Ibid., p. 333. Report; Evidence p. 4. 49 HRA Series I, vol. xx, pp. 837-44. 106 a great distance from Sydney, making it difficult and expensive to get supplies into the stations and their wool out to Sydney. This had led settlers in some areas to search for and establish shorter lines of land communication, and roads and routes had been, or were being, opened between areas on the table- lands and western slopes of New South Wales and harbours along the coast.

Routes linking the New England area to Port Macquarie and the Clarence River were being opened, while in the southern part of the colony a route from the inland areas via Nerriga to Jervis Bay had been opened, and routes to Bateman's

Bay and Twofold Bay were being explored. These new lines of communication with Sydney reduced the amount of expensive land transport needed and so eased costs in existing areas of settlement, but they did not open up new areas for settlement. Expansion could take place to the north and to the west. However the opinion was then generally held that sheep could not be successfully raised in the warmer climates found north of Moreton Bay, while to the west, expansion had reached limits set by transport costs.

Gipps referred to the checks on westward expansion in two parts of his despatch. In one part he wrote:

Wheresoever a River presents itself running to the Westward, the course of it is marked by Stations . . . but, as every step in this direction leads the Settler farther from the Sea, as well as from Sydney, the limit seems, in the opinion of some people, to be attained, beyond which the feeding of Sheep will cease to be a profitable employ­ ment, the Wool not bearing the expense of transport from a more distant country.

He described how settlers in areas nearer the coast had sought to reduce trans­ port costs by utilizing cheaper water transport, while those in the interior regions apparently had hoped for the discovery of some navigable waterway to enable them to likewise benefit, for Gipps, in reporting on recent inland 107 explorations, stated, "the expectation of finding a large River, or an Inland

Sea sufficiently near to be of any use to our Settlers, has altogether vanished; and consequently the desire to penetrate into the Interior is less ardent than f, 50 it was.

Within the frontiers of settlement there was a considerable amount of unoccupied land but it was either topographically unsuited for sheep or had no access to river frontages. Occupation had spread along rivers for the settler who occupied the river frontage also had the benefit of the hinterland.

Without access to rivers land was useless for though dams and reservoirs could have been built the returns on wool did not justify their cost on purchased land, while on squatting land the uncertainty of tenure precluded such expend­ iture. Taking up new land for flocks therefore involved going further from the coast, and by 1840 this was recognized as being unprofitable in terms of the declining wool prices and the increasing costs. P. L. Campbell, the

Acting Colonial Treasurer, appearing before the Committee on Immigration in

July, 1840, pointed to the implications of this when he stated "to restrict or restrain the occupation of Crown Lands beyond the Boundaries . . . would be the finishing stroke to complete the ruin of the Colony.

The 1841 and 1842 Committees on Immigration took evidence from many of the largest pastoralists in the colony. Naturally the evidence given there

~^Ibid., pp. 843, 844.

~^Votes and Proceedings . . . 1840, p. 334, Report of Committee on Immi­ gration. Evidence, p. 4. 108

stressed the adverse effects the shortage of shepherds had had on wool

production just as the evidence given by pastoralists to the 1844 Select

Committee on Crown Land Grievances stressed the adverse effects of the increase

in the minimum price of government land. The premise common to all this

evidence regarding distressed condition of sheep-farmers in the early eighteen

forties, was that the lessened demand for surplus livestock had decreased the

profitability of sheep-farming. This claim can best be examined in terms

of the costs and returns of sheep-farming as shown in contemporary accounts, and these will be discussed in Chapter v* For our present purposes, it is

sufficient to refer to two examples of comments on the colony's distress which

involve considerations of the profitability of sheep-farming.

David Monro (later Sir David Monro, Speaker of the New Zealand Parliament) arrived in Sydney in mid-1842 and shortly afterwards wrote the following comments in a letter to England.

Before X left home, I was aware of the fact that the proceeds of the sale of wool did not more than recompense the flockmaster for the expenses of his establishment; it is only an exceedingly well managed establishment that even accomplishes this, and I believe it to be the ordinary calculation in this colony, that it takes the wool and the wethers of the flock to pay the current expenses. To what then does the proprietor of sheep lock for his profit? He looks to the increase of his flock, of which you have seen grand tabular statements in all the hand-books, guides, etc. which are in circulation, and which undoubtedly if the price of sheep were permanent that is to say if he bought at a certain price and could sell the increase at the same price, would be a certain and splendid profit. The whole question then hinges upon the point of the market for the increase and this depends upon the amount of available country ... As long as the country is extending, it is a profitable thing to have sheep . . . When you have what you consider a sufficient number you dispose of them to persons who emigrate with capital in the hopes of doing what you have done, and who drive the increase which you have sold them on to fresh pastures and are succeeded by others, who go still further and so on and on. If the whole of Australia were, say like the pastures about Port Phillip, there would be but one limit to this process and that would be where the land carriage 109

would be so great that the value of wool would not bear it. This may be taken at about 300 miles from the port of shipment . . . /Once this point is reached/ the aspect of things will change eg^irely; there will no longer be a market for the increase of the sheep.

Monro cited Sydney newspapers to suggest that this point had been reached:

"that the colony is at present under this deteriorating cause". However

Monro did not think this was the sole or principal cause of the colony’s economic troubles as it had not "had time to make itself fully felt." The main cause lay he claimed, in the previous "gross over-estimate of its resources and prospects . . . /which7 led to speculation to an enormous amount."

A second example where a link was suggested between the lack of a market for livestock and the colony's distress was in an article, "The Prospects of the Colony" in the New South Wales Magazine for October 1843, where the causes of the colony's "sadly altered circumstances" were listed as

Firstly, the fall in the price of our wools contemporaneously with increase in the cost of production . . .

Secondly, the loss of market for surplus stock, and for merchandise, by cessation of immigration, in consequence of the absurd minimum price of land.

Thirdly, the sending out of the colony cash to purchase one-third of the grain and flour consumed by its inhabitants.

These two examples typify the opinion widely held in New South Wales in the early eighteen forties, that it was the lack of a market for surplus livestock which primarily accounted for the pastoral industry's distressed condition. The immediate cause of this was seen in the decline or ending of the entry of immigrants with some command of capital, but opinions varied as

) ‘The letter written by Monro on August 17, 1842, is preserved in the Mitchell Library. 110

to the ultimate cause, i.e. the cause of the drop in the flow of monied

immigrants. In 1842 and 1843 explanations (such as that put forward by

Monro) which stressed the lack of land for economic production of wool, were

common; in 1841, in articles in Sydney newspapers and in evidence to the

Committee on Immigration particular stress was laid on the effects of the

ending of convict assignment and of the labour shortage.

Professor S. J. Butlin has suggested that the slump of 1841-3 "developed

from conditions within the wool industry*", from "the apparent exhaustion of

opportunities for profitable expansion into new areas after a decade in which

its profits and its technique of growth had been reckoned in terms of geograph­

ical spread". The value of land and livestock bought in the expectation of

a continued rise in pricey fell with the slowing down in expansion. Merchants

in Sydney and Melbourne, many of whom had invested heavily in now-depreciated

land, found themselves pressed for payment for the consignments of goods

supplied them from London, for which there was little or no sale in the colony,

Settlers financed by merchants were in turn pressed for payment and when this was not forthcoming found their flocks sold and themselves forced into in­

solvency.

The process is well illustrated in the song "The Settler; or, Billy

Barlow in Australia", written by a squatter in 1843. J.C. Byrne in his

Twelve Years' Wanderings in the British Colonies published in 1848 stated

that the song "naively describes the course and fate of one of these, /a

53 Butlin, op. cit., pp. 317-24. Ill

squatter/ which will serve as a true picture of many others, between 1838 and 54 1843." Billy Barlow was a fictitious character, representative of the

"young bachelors of capital, who arrived in the colony to make a fortune"

during the late eighteen thirties^but the other persons mentioned in the song

are identifiable. Day was police magistrate at Maitland; Barr, Rodgers & Co.

were Carr, Rogers & Co., Sydney solicitors; Kinsmill was a sheriff's bailiff;

and Thomas Burdekin was a Sydney merchant and financier. ^ This is then the

story of Billy Barlow.

When I was at home, I was down on my luck, And I yearnt a good living by drawing a truck; But old aunt died, and left me a thousand - "oh, oh! I'll start on my travels," said Billy Barlow. Oh dear, lackaday, oh! So off to Australia came Billy Barlow.

When to Sydney I got, there a merchant I met, Who said he could teach me a fortune to get; He'd cattle and sheep, past the colony's bounds, Which he sold with the station for my thousand pounds. Oh dear, lackaday, oh! He gammon'd the cash out of Billy Barlow.

When the bargain was struck, and the money was paid, He said, "My dear fellow, your fortune is made; I can furnish supplies for the station, you know, And your bill is sufficient, good Mr. Barlow." Oh dear, lackaday, oh! A gentleman settler was Billy Barlow.

54 Byrne, 0£. cit., p. 197. 55 "A person named Burdekin, an extensive ironmonger and storekeeper, had amassed by his trade and private discounting on an extreme scale, a vast fortune . . . No man in Sydney was both so much disliked on account of the usurious interest ... he extracted from those who were unfortunate enough to fall into his hands, and so much feared on account of the power of his wealth, joined with the manner he employed it . . . Anyone who had occasion to pass bills . . would fall under his power for it was exceedingly likely the bills would find their way into his hands." (Byrne, ££. cit. , pp. 127-9). The two legal terms mentioned in the text require explanation. A f_i fa. (fieri facias) is a writ commanding the sheriff to sell the property of a debtor to obtain the amount for which the creditor obtained judgement. If the 112

So I got my supplies, and I gave him my bill, And for New England started, my pockets to fill; But by bushrangers met, with my traps they made free, Took my horse, and left Billy bailed to a tree. Oh dear, lackaday, oh! I shall die of starvation, thought Billy Barlow.

At last I got loose, and I walked on my way; A constable came up, and to me did say, "Are you free?" says I; "Yes, to be sure, don't you know?" And I handed my card, "Mr. William Barlow." Oh dear, lackaday, oh! He said, "That's all gammon," to Billy Barlow.

Then he put on the handcuffs, and brought me away, Right back to Maitland, before Mr. Day; When I said I was free, why the J.P. replied, "I must send you to Sydney to be identified." Oh dear, lackaday, oh! So to Sydney once more went poor Billy Barlow.

They at last let me go, and I then did repair For my station once more, and at length I got there; But a few days before, the blacks, you must know, Had spear'd all the cattle of Billy Barlow. Oh dear, lackaday, oh! It's a beautiful country! said Billy Barlow.

And for nine months before, no rain there had been, So the devil a blade of grass could be seen; And one-third of my wethers the scab they had got, And the other two-thirds had just died of the rot. Oh dear, lackaday, oh! I shall soon be a settler, said Billy Barlow.

And the matter to mend, now my bill was near due, So I wrote to my friend, and just asked to renew; He replied, he was sorry he couldn't, because, The bill had pass'd into Tom Burdekin's claws. Oh dear, lackaday, oh! But perhaps he'll renew it, said Billy Barlow.

amount so raised was insufficient, as in Barlow's case a ca sa (capias ad satisfaciendum) could then be issued which meant the debtor was to be im­ prisoned till the creditor's claim was satisfied. 113

I applied; to renew he was quite content, If secured, and allowed just 300 per cent! But as I couldn't do it, Barr, Rodgers & Co. Soon sent up a summons for Billy Barlow. Oh dear, lackaday, oh! They soon settled the business of Billy Barlow.

For a month or six weeks I stewed over my loss, And a tall man rode up one day, on a black horse; He asked, "Don't you know me?" I answered him, "No!" "Why," says he, "my name's Kinsmill; how are you, Barlow?" Oh dear, lackaday, oh! He'd got a fi-fa for poor Billy Barlow.

What I had left of my sheep, and my traps, he did seize; And he said, "They won't pay all the costs and my fees!" Then he sold off the lot, and I'm sure 'twas a sin, At sixpence per head, and the station given in. Oh dear, lackaday, oh! I'll go back to England, said Billy Barlow.

My sheep being sold, and my money all gone, Oh, I wandered about then, quite sad and forlorn; How I managed to live, it would shock you to know, As as thin as a lath, got poor Billy Barlow. Oh dear, lackaday, oh! Quite down on his luck was poor Billy Barlow.

And in a few weeks more, the sheriff, you see, Sent the tall man on horseback once more unto me; Having got all he could by the writ of fi-fa, By way of a change, he'd brought a ca-sa. Oh dear, lackaday, oh! He seized on the body of Billy Barlow.

He took me to Sydney, and there he did lock, Poor unfortunate Billy fast "under the clock," And to get myself out, I was forced, you must know, The schedule to file of poor Billy Barlow. Oh dear, lackaday, oh! In the list of insolvents was Billy Barlow.

Then once more I got free, but in poverty's toil; I've no "cattle for salting", no "sheep for to boil;" I can't get a job, though to any I'd stoop, If 'twas only the making of "portable soup". Oh dear, lackaday, oh! Pray give some employment to Billy Barlow. 114

Except for his capture by bushrangers with its unfortunate consequences,

Billy Barlow's experiences were shared by many new squatters in the early

eighteen forties. Not surprisingly, according to J. A. Balfour, who in his book A Sketch of New South Wales published in 1845, commented:

One can easily understand how men, who had purchased sheep partly upon credit, a few months previous to the cessation of the assignment system, or even shortly after (for the baneful effects of that stoppage were not generally diffused until many months after it took place), were ruined. These men paid LI and LI 15s. per head for their sheep, partly in cash, but by far the greatest portion in long dated bills, bearing ten and twelve per cent interest. It mattered little then, how provident, economical, and hard working they were, since it was impossible that any other destiny than that of the insolvent court could await them, for they had to pay this exorbitant interest on large sums from a business that, with the soundest management, did not much more than clear its own expenses; and when the bills became due, all they had to meet them was an article that had fallen since they purchased it 1,000 per cent. Notwithstanding this, the settlers who purchased their sheep with cash, never giving bills or contracting debt, never entering into partnership with an individual or in any joint-stock company, had not fair reason for taking refuge in the insolvent court, and such a result can alone be imputed to improvidence, assuming that no great fatality, proceeding from natural causes, visted their flocks.-*®

Excessively high interest rates, merchant's perfidy, settlers' extravagance, and natural calamities - all of the things mentioned by Balfour and in Billy-

Barlow -.were either singly or collectively cited during the depression to explain the distress of the settlers: the distress which caused many of the prototypes of Billy Barlow to "file their schedules" in the insolvency court.

Extravagance was curbed by the conditions of the time, while the drought which had created such havoc came to its natural end, but for the settlers there remained the problems involved in borrowing from Sydney merchants at high interest rates. Banks were loath to lend to settlers directly; according to

56 J. A. Balfour, A Sketch of New South Wales, (London, 1845), p. 98. 115

many, because of the domination of the directorates of the local banks by Sydney

merchants, but the banks claimed that it was necessary because settlers were

generally slow in paying their debts and because they had little or no tangible

security to offer.

Three bills brought before the new partly-elected Legislative Council i». if** 3 during the first month of its existence^'were designed to ease the lot of the

settlers, two by facilitating borrowing and one by easing the lot of those in

debt. Wentworth gave notice of two bills on the first day of business of the

Council, which were passed and became the Solvent Debtors Act and the Lien on

Wool and Live Stock Act. The former provided that

Any person, who is desirous of obtaining time for the payment of his debts, may draw up, and verify on oath a statement of his assets and liabilities; and if, on inspection of this verified statement, three fourths of the creditors, both in number and value, shall be of the opinion that the party is solvent, and shall execute to him a letter of license, declaring that they allow him a specified time for payment of his debts, this licence shall also bind the other creditors, and the debtor shall be free from suit ugtjil the expiration of the time specified in the letter of license.

Gipps gave his assent though he did not expect "much benefit to be derived from

the measure, the tendency of it being to increase the 'bolstering up1, as it is 58 called, of persons in a tottering condition." The latter, the Lien on Wool

and Live Stock Act, was to enable pastoralists to borrow by giving security

in the form of a preferable lien on their ensuing wool clip, or by mortgaging

their livestock. Gipps stated that "no salutary effect is anticipated from it

^Braimf Qp. cit., Vol. II, pp., 33-4 58 HRA Series I, Vol. xxiii, P- 181. 116

by any party”, but then Gipp.3 considered that none of the economic ills of

the colony could be cured simply by legislation. The Act, as the Secretary

of State later pointed out, was "irreconcilably opposed to the principles of

Legislation immemorially recognized in this Country respecting the alienation

or pledging of things moveable", and could only be justified as a temporary 59 measure designed to help overcome the colony's peculiar difficulties.

The third measure proposed by Wentworth, a Usury Law fixing the maximum

rate of interest at five per cent, was not passed. Wentworth in evidence to

the 1834 Committee on the Usury Laws had advocated fixing the rate of interest

at ten per cent, a rate he thought compatible with the profits which could

then be earned in grazing pursuits in the colony. The Interest Act passed in

1834 (Forbes' Act) was in Wentworth's opinion one of the main causes of the depression, for it had declared "that any rate of interest might be enforced" and thereby attracted an influx of British capital lent in the colony at

"usurious rates". The bill he brought forward in 1843 was designed to curb

these rates by limiting the rate of interest retrospectively, and by empowering the government to buy up all existing mortgages. The proposal was rejected by the Council, but a few days later two banks, the Union Bank of Australasia and the Commercial Banking Company of Sydney, reduced their rate of interest by two per cent, so that part of the bill's intention was achieved without legislation.^

HRA, Series I, Vol xxiv, p. 57.

Butlin, op, cit., pf. 33&®fc. 117

While Governor Gipps was diffident about the desirability or efficacy of the two Acts which were passed, the Secretary of State, Lord Stanley, found them repugnant. He felt the Lien Act would "place Society at the mercy of any dishonest Borrower", while the Solvent Debtors Act "could not be incorporated into the permanent Code of any Country without the subversion of all faith in 61 the ordinary dealings of mankind." Both Acts could continue in operation for only two years, he ordered, which decision provoked a hostile reaction in the colony. The Sydney Morning Herald expressed regret that the beneficial effects of the Lien Act were not officially appreciated, explaining:

It found them /pastoralists/ involved in debt, and in those corroding cares and anxieties which are so fatal to the energies of hopeful industry. It approaches them with the benign aspect of a comforter. It brought them unexpected relief. It invested their flocks with a new species of value - a value which enabled them to raise money upon the carcase or fleece without even parting with the property.^2

The Legislative Council appointed a Select Committee in August 1845 to consider the position, and its report referred to the "domestic legislation ... to place the monetary transactions of the principal class of our colonial producers on a secure foundation" as "endeavours which have so largely contributed to the 6 3 reviving prosperity of the community at large." Evidence given to that

Committee showed that the banks still preferred to involve merchants in the advances made to wool growers, but that considerable amounts had been lent under

f.’ -I HRA Series I, Vol. xxiv, p. 58. 62 Sydney Morning Herald, August 9, 1845. 6 3 Votes and Proceedings . . . 1845. "The provision for liens on wool and mortgages on livestock was a first major step of far-reaching significance in formalising and systematising techniques and sources of finance. It might, with some justice, be regarded as the critical nineteenth-century innovation in the industry." (N. G. Butlin, Investment in Australian Economic Development (Cambridge, 1964) p. 127). 118 the provision of the Act. Between the time it came into force on September 15,

1843, and the end of the year, there were sixty-three liens on wool for a total amount of L32,625 and 124 mortgages on livestock for L202,699, registered in

New South Wales. But while this Act and the Solvent Debtors Act aided those who had weathered the storm through to 1843 or those who had come and established themselves during the depression when prices were low, they did little to spare those who had bought livestock and supplies at high prices using personal bills bearing high rates of interest during the boom years at the end of the eighteen thirties. Margaret Kiddle has reported of the Western District of Victoria that during the depression, "Those 'sold off' were the brash 'young gentlemen' who had come without much money behind them, convinced they would be able to 64 make fortunes in a few years." These were the Billy Barlows, those whom

Balfour thought inevitably faced ruin. They were not able to benefit from these legislative provisions nor from the discovery of the advantages of boiling-down sheep and cattle for tallow.

This discovery first reported in June^ 1843, is generally attributed to

Henry O'Brien of Yass though the New South Wales Magazine reported in Augusta-

1843, that a shipment of tallow sent from Port Phillip has been sold in

London at a public auction in January^ 1843. In July the magazine had hailed the "new and unexpected source of profit" recently discovered, pointing out that it would solve the major problem facing the pastoral industry - the want of a market for surplus livestock. Taking into consideration the price for tallow in London and the amount produced from each sheep it was claimed that

64 Margaret Kiddle, Men of Yesterday, (Melbourne, 196?) p. 119 sheep were worth at least six shillings, a price far above that being obtained at sales. This news halted the downward trend of sheep prices and

Gipps could report in October, 1843, that "the value of sheep had somewhat improved" though a month later he had to report that "the improvement, . . . in the price of sheep had not been maintained.Certainly boiling-down provided ready cash for hard-pressed graziers. T. A. Murray, a prominent squatter, instructed the manager of his station in September, 1843, to send two thousand fat sheep to Sydney to be boiled down to get L300 he needed urgently to pay tradesmen's bills and debts of honour in Sydney. In this way it engendered some optimism in the minds of settlers, but of more long­ term significance was the consequent check on the rate of growth of sheep numbers. As Balfour explained in 1845:

The benefit that has arisen from the boiling down of sheep and cattle has hitherto been great, . . ./i17 has obviated in a great measure the difficulty arising from the disparity in the supply of labour in com­ parison to what its demand would otherwise have been. Indeed, had the boiling-down system not been introduced, the supply of labour would have been so disproportionate to the quantity required, and the wages consequently so high, that in a few years there would not have been a solvent settler in the whole colony. °

The passing of the Lien Act and the discovery of boiling-down in 1843 are often depicted as constituting a turning point in the prosperity of sheep-farming, 6 7 but recovery started much later and even then was slow. Wool prices con­ tinued to fall in early 1844 and when they did show signs of improvement late in that year colonists were not sure whether the improved prices would continue.

This meant that there was a continuation^of the "disinclination to buy sheep",

^HRA Series I, Vol. xxiii, pp.^211. ^Balfour, op. cit. , pp. 96-7.

^See T. C. Coghlan, Wealth and Progress of New South Wales (Sydney, 1897) pp. 689-98. "About the beginning of the year 1844 some slight reaction was experienced in the trade of the colony, and the depressed state of local inter- 120 though this may also have been due to the uncertainty created by the new squatting regulations issued by Governor Gipps in April, 1844, (which are discussed in Chapter VII). The changing circumstances of the middle years of the eighteen forties can be seen in letters written by Sawuel Rawson, the elder brother of Jkrirn Rawson whose colonial career has been referred to earlieri • 68.

■J oV\ r\ Samuel Rawson came to Australia from Calcutta for health reasons in

November 1841. He had had considerable experience as a businessman in India and when he first came to Australia dabbled rather disastrously in trade, then in mid-1844 took up a station in the New England area, accepting it in part payment for a debt. Letters he wrote to his father between September, 1844, and the end of 1846 describe the conditions of the wool industry in New South

Wales in the years immediately following the depression. In the first he reported that he had taken his sheep at five shillings per head and that the price of sheep had, ever since he had taken the station, risen. The only problem was whether Gipps enforced his new regulations, for this, Rawson implied, would adversely affect the progress of the wool industry. In May,

1845, Rawson reported that sheep were selling at five shillings per head

ests was felt to be reviving. Contemporary writers hailed the new year as a fresh starting-point for renewed enterprise and confidence: but, unfortunately, the condition of things was in no way permanently im­ proved and the depression shortly afterwards became more pronounced than ever." (p. 697) 68 Rawson Papers, Australian National Library, Canberra. 121

(without stations) but good stations were becoming dear due to their

increasing scarcity. The future looked good however,for wages and the

costs of rations were low - "a third of what they were" in the late thirties

and early forties - while sheep were "one fifth the cost of what they were";

the only problem was whether the price of wool "remains steady at home". In

Apgust, 1845, Rawson was able to report "wool rising at home has made sheep

rise here enabling many to retain their stock who otherwise would have been

obliged by their agents to sell at any sacrifice." Difficulties began to

appear early in 1846; labour was very scarce, Rawson reported, "and unless

emigration recommences, it is very evident we shall have wages soon as high as

ever. We are paying over thirteen shillings a week for extra hands to assist

at lambing as well as giving extra rations, and in this country, when men are

scarce they become our masters, and though you are paying double wages, you

only get half the quantity of work badly performed." Nevertheless the price

of sheep continued to rise and in June^ 1846, stood at six shillings without

stations, though Rawson continued to complain of the shortage of labour and

the high wages which had to be paid. But in a letter on Christmas Day, 1846, a new note of pessimism appeared for the price of wool had recently dropped

substantially in Sydney and the prices of sheep were consequently falling in value.

The change in the conditions between 1846 and 1847 are reflected in the

reports Governor Fitzroy sent with the annual "Blue Books". In that for 1846, he attributed the decline in the exports of tallow in 1846 to "the great deficiency of the natural grasses in the greater part of 1846" but thought that

"the return of favourable seasons, the low price of wool in the European 122

Markets, and the high price of labour prevailing in the Colony will probably restore this item to its former large amount". The increase in the value of tallow exported from L28,107 in 1846 to L108,186 in 1847 prompted the remark in the latter year's report, that it "bears out the remarks under this Head in my last Report". During 1847, Fitzroy reported, "much property has changed hands . . . and many of the oldest and most respectable in­ habitants have suffered severely from pecuniary losses and the depreciated value of landed property within the settled districts", however, he thought that "the renewal of Immigration and the decrease of the price of labour" would materially assist the revival of prosperity.^ This was not to be, for the price of wool in the English market continued to decline as shown in the "official" wool prices (see Table *£). In 1849 when wool prices were at their lowest since 1831 Sir Thomas Mitchell wrote of the state of the colony, "Our progress is at present rather retrogressive - wool, so low in price has affected all branches of business here and the value of property.

Though wool prices recovered a little in 1850 sheep-farming did not regain its prosperity till the demand for meat occasioned by the influx to the gold­ fields in the early eighteen fifties raised the price of sheep and provided a market for surplus livestock.

1843-51 was "a period of depression and long-continued distress"yet "the flockmasters' unchallenged supremacy" - to borrow a phrase of Brian Fitzpatrick

°^HRA Series I, Vol. xxv, p. 599; Vol. xxvi, p.426.

^Sir Thomas Mitchell's Papers, Mitchell Library. 123

- was confirmed during this period by the Order-in-Council of 1847 which gave squatters leases for the land they occupied. This completed the regularizing of squatting; squatters were ensured land by this Order, just as capital had been by the Lien Act of 1843. All pastoralists needed was to ensure a supply of labour of a type suited for pastoral pursuits, and this they tried to do, though with limited success, by the demands they made for an increased flow of immigrants during the mid-eighteen forties, and later, by the demands for the resumption of convict transportation. The legislative enactments of the period 1843-51 completed the formal transformation of New

South Wales into a "sheep-walk"; the wool industry now institutionally dominated the New South Wales economy and society. The industry had weathered the depression of the early eighteen forties and had grown therafter in spite of labour shortages - intensified in 1849-50 by an efflux to the Californian goldfields - and of low wool prices. But this continued growth was not un­ usual for the industry, as reflected in sheep numbers and wool exports, had continued to grbw throughout the period 1822-51 despite droughts, low wool prices, labour shortages, land problems, etc.

Returns showing the number of sheep in New South Wales during the period 1822-51 are few in number and questionable in accuracy. There are returns from livestock censuses taken in the years 1825 and 1828, though the accuracy of the latter census is questionable. There are also figures for the sheep population for the years 1843-51 published in the "Statistical

Returns" in the Votes and Proceedings of the Legislative Council for the years

1843-51, though again, the accuracy of the figures is doubtful, for graziers tended not to report the full size of their flocks in squatting areas so as to 124 avoid part of the assessment levied on the number of livestock depastured on crown land. While such errors are obviously involved in these figures, these are the only official figures of sheep numbers, so that any discussion concern­ ing the growth in the number of sheep must use these figures while recognizing their limitations.

There were no official attempts made between 1828 and 1843 to ascertain the total number of sheep in New South Wales, though from 1839 when a tax based on livestock numbers in squatting areas was imposed, censuses of the number of livestock in these areas were compiled. Private estimates of the number of sheep appeared from time to time during the period 1828-43, generally to sub­ stantiate claims concerning the rapid progress the colony was making, and in­ variably made by dividing the quantity of wool exported in a particular year by what the estimator considered to be the average weight of a fleece produced in New South Wales. Such a method can give a reasonable approximation of the number of sheep in a given year, though the method must be used with caution, for the relationship between the rate of growth of wool exports and that of sheep numbers can be either lagged or simultaneous. An acceleration in the rate of growth of sheep numbers would initially increase the proportion of lambs in the sheep population and since lamb fleeces weigh only about half as much as those from mature sheep, the new rate of growth of sheep numbers would exceed the rate of growth of the amount of wool produced and exported, furthermore if the rate of growth of sheep numbers then declined, the rate of growth of wool exports could continue while the lambs born in the period of rapid increase matured so raising the average fleece weight.

Alternations of faster and slower rates of growth in sheep numbers need not therefore be accompanied by simultaneous changes in the rate of increase in 125 the quantity of wool exported, for the latter might lag the former. Neverthe­ less while there is no simple and direct relationship between the two growth rates over short periods, there is an obvious connection between the growth of wool exports and of sheep numbers during periods of five years or more. At least there seems to be a sufficient relationship which, when taken in conjunct­ ion with other information, such as the incidence of droughts and their effect on sheep numbers, permits some indication to be made of the possible movement of sheep numbers during the period 1828-43 for which no official statistics are available.

The most noticeable feature of figures for wool exports from New South

Wales in theperiod is the decline in their rate of growth which began in 1840

(see Figure 2), which, at least suggests that there was some comparable slowing- down in the rate of growth of sheep numbers during the eighteen forties. The behaviour of the export figures, and remarks made by graziers in 1841-2 to the effect that they had to curtail the increase in their flocks because of labour shortages, suggest that the rate of growth of sheep numbers began to decline in 1840. This is substantiated by the fact that the average annual rate of increase in the number of sheep depastured in squatting areas during the four years after December, 1839^ was approximately eight per cent, as compared with the average annual rate of growth in the number of sheep in New South

Wales during the period 1828-43, of eighteen per cent. If the behaviour of the figures for sheep in squatting areas is at all representative of the changes in the total sheep population of the colony (there seems to be no evidence to suggest it was not), then it is evident that there was a lower rate of growth

71 See Statistical Returns in Votes and Proceedings . . . 1843 126 of sheep numbers^in 1840. The intense drought conditions which prevailed in late 1838 and into 1839, and the catarrh which afflicted many flocks in 1839, led to sizeable livestock losses so it is more than probable that the lower growth rate of sheep numbers started in 1839, so as an informed guess it appears reasonable to place the inflexion point in the long-term growth rates of sheep numbers in 1839.

To give some quantitative substance to the changes in sheep numbers it is necessary to estimate the number of sheep in 1839 and this might be done by dividing the exports for that year by the average weight of wool exported per sheep during the period 1843-51 for which data of both sheep numbers and wool exports is available. This figure can then be used to show the trend in the increase in sheep numbers during the period 1839-43. This still leaves the movement of sheep numbers between 1828 and 1839 unknown but here we have two guidelines, (i) the fact that drought conditions in the late twenties led to some livestock losses and hence some decline, though possibly slight, in the growth rate; and (ii) the trend of the increase in the quantity of wool exported during the period 1828-39. The former would suggest some deceleration 72 in the rate of increase in sheep numbers extending to 1831, while the trend of exports suggests a sustained increase in sheep numbers. Assuming that there was a similar trend in sheep numbers and wool exports between 1831 and

1839 would then allow the charting of possible movements in sheep numbers during the period 1828-43 to be completed.

72 This is not incompatible with Lang's claim that sheep numbers continued to increase rapidly, for it only contends that the rate of increase was less rapid than between 1825 and 1828. Quantity (’00,000) 300-. 100 1821 - 1825 New Number / Source:

South \

' of

/ Wales Sheep, Votes Figure

and 1821 and

2

Wool Proceedings...: -

51

Exports:

1843-51 1850 Number 126A Exports Sheep Wool UfcO of 127

The resultant course may be conjectural but sufficiently based on such indicators as are available to give it some substance. The picture which emerges is of a rapid increase in sheep numbers till 1828, after which drought conditions slowed down the rate for about three years. This was followed by an eight year period of rapid increase, after which a shortage of labour and an exhaustion of land suitable for expansion showed down the growth rate; till the mid years of the forties when wool prices rose and there was an increase in sheep numbers. But they thereafter declined as wool prices fell, and as labour shortages and low wool prices led to the slaughter of large numbers of sheep for tallow production in the last two years of the forties and the first two of the fifties. Considered as a whole^he period 1822-51 was one of rapid increase in sheep numbers, with the rate of growth of sheep numbers between 1822 and 1839 being greater than in any subsequent period in the nineteenth century, and since more sheep required more land, this rapid 'growth in sheep numbers necessitated a vast and spectacular geographic expansion of 73 settlement particularly during the thirties. The occupation and-'settlement of this vast area to accommodate the rapidly growing flocks of the colony was the product of the expectations of many Billy Barlows as well as many local and

British men of substance, expressed in terms of the methods of sheep-herding then employed in the colony.

/ jThe geographic expansion of the industry will be discussed in Chapter VI, where governmental policies in relation to this expansion are examined. 128

CHAPTER IV

THE SHEEP-FARMING TECHNOLOGY

Changes made in the technology of wool production early in the second half of the nineteenth century became embodied in "the heavy capitalised

and equipped pastoral stations", whose establishment has been credited

with, transforming "the social and economic status of the pastoralist"; in­

stituting "a new pattern of labour relations in rural society"; creating

a ’’particular pattern of relationships between Australian pastoralists and

financial institutions in the development of mortgage financing"; and

leading to "a rising interest commitment . . . translated in national terms

in a growing private interest bill in the Australian balance of payments?"

This is an impressive list, but other social and economic consequences could be attributed to the technological changes which appeared after 1851: changes which occurred in a period when the prosperity of New South Wales was not so

intimately identified with that of the wool industry as in the thirty years

preceding 1851. In this earlier period the technology of wool production may be regarded as having played an even more significant role: as a major

force shaping colonial society; as a major determinant of government policies; and as the major factor defining the structure of the New South Wales econ­

omy. To appreciate how the methods of wool production were associated with

N. G. Butlin, Investment in Australian Economic Development, 1861-1900, (Cambridge, 1964), pp. 5$-$. 129 these aspects of pre-1851 development, it is first necessary to examine the nature of the technology, its origins and evolution during the period.

It is generally contended that the system of flock management--the main part of the wool-production technology--used in New South Wales was 2 initially derived from British livestock husbandry methods, and that it remained unchanged until after the discovery of gold in 1851 "when the old hands deserted the run en masse for the 'diggin's', and pastoralists 3 has to begin fencing their stations". This traditional depiction of the origins and evolution of the wool technology is acceptable as a sweeping generalisation, though for purposes requiring less broad statements it is necessary to qualify the two basic tenets of the conventional story

Firstly, it must be recognized that while the methods of flock manage­ ment first adopted in New South Wales were reproductions of some xnepaxxkxxlx- iooetxxE some features of practices used in some parts of Britain, they were not copied from the most advanced methods of sheep-farming in use in

Britain. At the time the New South Wales wool industry was established there was a close association in English farming methods between sheep­ farming and arable farming, but these were tried for only a very short time by a few farmers in the colony during the latter part of the Macquarie era.

Their experiment was of limited duration and a newcomer reporting his first

2 e.g. See James Bonwick, Romance of the Wool Trade, (London, 1887) p. 22. 3 R. Ward, The Australian Legend (Melbourne, 1962), p. 130. 130 impressions of New South Wales to an English friend, wrote in February, 1819, 4 "Livestock is fed in the Forest upon the wild and native produce of the Land!": the exclamation mark signifying his surprise at the seeming backwardness of local methods compared to those in England, which, he went on to suggest, would if generally introduced into the colony materially benefit local farmers.

But widespread ignorance of the principles of agriculture, the natural fertility of the alluvial soils in the main agricultural area, and the separation of commercial arable and pastoral farming from 1804 onwards, had precluded the use of sheep to manure the soil on farms in New South Wales as was then the practice on well-run English farms. This was unfortunate according to James

Atkinson, who in his book An Account of the State of Agriculture in New South

Wales published in 1826 stated: "it may be safely stated that folding fatting sheep upon green crops would be the greatest improvement that could be introduced into the agriculture of New South Wales", but, he added, "many proprietors are of opinion that it is injurious both to the sheep and their fleeces to fold them upon cultivated lands.The use of sheep for manuring fields, the cultivation of artificial grasses, and the use of turnips as stock fodder - all of which were major features of the Agricultural Revolution

- after a minimum of experimental use by a few large landowners in the colony, were pronounced unsuitable for incorporation into the techniques of sheep- £ farming for the production of fine wool. Admittedly British experience in

4 "Agricultural Papers", Mitchell Library, Sydney. 5 James Atkinson, An Account of the State of Agriculture in New South Wales, (London, 1826), p. 79.

6Ibid. 131 this production was little further advanced than that of New South Wales, for merinos, the breed with which it was intended to produce fine wool in the colony, had not been introduced into Britain till late in the eighteenth century so that British breeders were still working out the best methods to be used when colonial interest in merinos was developing. But even if techniques specifically related to merino breeding were still being learned in Britain, techniques of more general applicability such as the growing of artificial grasses and fodder crops, were available for introduction into the colony, but were not. Instead colonial sheep-farmers chose to exploit what they saw as the advantages of the natural pasture; an understandable choice, but one which was eventually to lead them into difficulties.

The second part of the conventional account stresses the static nature of the technology prior to the eighteen fifties. No changes were made in pasture use by introducing English methods of improvement (though conditions at certain stages prompted some individuals to suggest it), while the practice of shepherding the sheep by day and enclosing them in folds at night persisted, and was only done away with--it is claimed--when the migration of labour to the goldfields forced graziers to fence in their flocks and so dispense with shepherds. There is a corollary implied in this contention, namely, that there was no labour shortage, or at least no labour shortage of a sufficient degree of intensity before the eighteen fifties to induce a change in the technology such as was made during the fifties. There was however much talk in New South Wales between 1835 and 1851 of labour shortages and of the diffi­ culties they created for pastoralists. These shortages were sufficiently 132

serious to require some adaptation in the way sheep were shepherded, though no major change in the technology was implemented to meet the difficulties arising from the labour shortages described before government committees during

the latter half of the eighteen thirties and during the forties. Some in- dividuals pointed to the need to revise the methods of sheep-farming, some even tried new methods, but such suggestions and experiments were generally

ignored while pastoralists continued to complain of the ill-effects of the

labour shortages.

Much can be learned concerning the development of the wool industry in

New South Wales from an examination of the ways in which pastoralists sought to overcome the problems created by the shortage of labour during the fifteen years before 1851. The fact that no major change in technique of sheep­ farming arose from these shortages is significant, and the reasons for the marked revision in the technique which came with the introduction of fencing in the fifties, may be seen in a clearer perspective if it can be shown why such a revision did not occur previously. But this can only be seen in the light of the history of the technology from the time of its beginnings in the colony.

Details concerning how the sheep brought on the First Fleet were cared for in the early years of the colony's existence are scanty. It is recorded that by day the sheep were grazed under the care of convicts, while by night they must have been put either into yards or sheds and guarded to protect them from

theft by convicts and attacks by native dogs (dingos). Native grasses were plentiful in the wooded areas surrounding the settlement so initially there 133 was no need to provide artificial grass or fodder for the animals: the main problems were to ensure that the convict shepherds did not allow the

sheep to wander; to protect the sheep at night; and to convert the coarse natural grasses into pastures suitable for sheep. The solutions found for each of these problems formed the system of flock management in operation

in New South Wales during the latter half of the seventeen nineties, which has been described by Captain Waterhouse, who then kept a flock of about a hundred sheep on his two hundred acre farm.

The universal mode of feeding sheep . . . has been by driving them into the woods on the natural pasturage, and ... it has very fully answered the purpose, even on limited feeding . . . Persons having stock . . . were fearful of letting the keepers drive them off their own premises, as many accidents might follow by straying, negligence, & etc., this of course much limited their feeding . . ./burning off was used? to get rid of the coarse and rank grass, which answered the purpose, the young grass springing up more luxuriantly for it . . . /The sheep/ were driven into the woods after the dew was off the grass, driven back by the man to get his dinner, and then taken out again until the close of the evening, when they remained in the yard for the night. g This system, with some minor variants adopted by a few flockowners, continued to be used till the middle of the Macquarie period. Then the

increased interest in producing wool and the shortage of suitable pasture for the growing number of sheep in the colony led to the introduction of

two changes in sheep-farming techniques; one of which became incorporated

7HRNSW, Vol V pp. 358-359 g John Macarthur once claimed that he housed his merinos at night instead of merely putting them in yards. This is a dubious claim and was possibly ad- vanced simply to impress those in England from whom he was seeking assistance. (HRNSW, Vol. V, p. 395). The Rev. Samuel Marsden did for a time adopt the English practice of grazing his sheep on fallow land instead of on forest pastures, but he does not seem to have persisted with this practice. (HRNSW, Vol. V, p. 414). 134 into the technology, while the other was only tried by a few graziers and then allowed to lapse. The first of these changes was the introduction of folds instead of yards for the sheep at night. Folds constructed of port­ able hurdles were then used in parts of England to enclose sheep grazing on fallow land: as used in New South Wales they enabled the sheep to be bedded down in a different place each night so keeping their fleeces cleaner, for a considerable amount of dirt accumulated in fixed yards. By 1818, folds were commonly used in the colony, though yards were still used by some sheep-farmers, as is shown in the description Wentworth gave of both systems.

Sheep are kept by night either in folds or yards. In the former case the shepherd sleeps in a small moveable box, which is shifted with the folds, and with his faithful dog, affords a sufficient protection to his flock against the attempts of these midnight de­ predators. In the latter the paling of the yards is made so high, that the native dog cannot surmount it; and the safety of the sheep is still further insured by the contiguity of the shephgrd's house, and the numerous dogs with which he is always provided.'

The second change which was of limited duration and which never went beyond the experimental stage, arose from the shortage of pastures in the +o colony. This led some graziers tw insistently^demand access to the land out­ side the Sydney Plain, the route to which had been opened up by the successful traverse of the Blue Mountains in 1813, but the general access to which was denied by Governor Macquarie's policy. Not all graziers saw the only solution to their problems in expansion into these new areas for they realized the attendant problems of supervision, so instead they sought to increase the

9 W. C. Wentworth, A Statistical, Historical and Political Description of New South Wales, (London, 1820), p. 131. 135

the carrying capacity of the land they already occupied, by fencing, by

growing artificial grasses, and by cultivating "turnips, taress, and Cape barley":practices derived from English farming methods, and much praised by Wentworth. Such measures were tantamount to a denial of what were

regarded as the natural advantages of New South Wales for wool production, and besides they could hardly be continued when the supply of convict labour available to pastoralists was as limited as it was in the last few years of

Macquarie's administration.

Some still maintained that the system used for raising sheep in the colony

questionable and not designed to ensure the best use of its pastures.

The major deficiencies according to Blaxland arose from a shortage of skilled

shepherds, a general lack of knowledge and appreciation of the principles of raising merinos, and a lack of individual initiative and enterprise; all of which could be overcome he claimed, by the formation of a joint-stock company managed by himself, and utilizing the methods of managing merinos employed in the Spanish Mesta system. This would have involved placing the sheep owned by the members of the company under the general superintendence of one man, who would divide them into flocks looked after by individual

shepherds, which would be taken into the interior where they were to be moved between lowland and highland areas to keep the sheep at an even temper­ ature; this being held to be an indispensible requirement for the production

^Ibid. , p. 132. See also J. Bigge, Report ... on the State of Agriculture and Trade, (London, 1823), pp. 13-4. 136 of fine wool. Blaxland's proposal for a radical change in the methods of wool production came to nothing, partly because of Macquarie's opposition, partly because of colonists' antipathy, and partly because, as Bigge observed

(obviously with the transhumance theory in mind) local experience had shown 12 changes in pasture were not indispensable for the production of fine wool.

The flurry of questioning of, discussion about, and experimentation with sheep-farming techniques which were obvious in the period 1815-20 soon died away. Plentiful pastures were made available by the Government and General

Order issued in November, 1820, while Spain's position as the main supplier of fine wool to Britain had been successfully challenged by Germany where there was a different technology to that used in Spain. The emphasis in the early twenties in the New South Wales industry was upon improving the quality of the fleece by introducing imported stock for BtaHM the shortage of improved sheep and their monopolization by the Macarthur family had been hitherto the main bottleneck to the increase of fine wool production.

Better quality fleeces produced with techniques which exploited the advantages

New South Wales possessed for wool production would soon allow it to success­ fully compete with Germany as a supplier of fine wool to Britain. There was no reason to question the techniques used which were eminently suited to the conditions of land tenure, labour supply and climate in the colony.

Blaxland's proposal is to be found in Bonwick Transcripts, Box 17, Mitchell Library. The idea concerning the movement of merinos to maintain them at even temperatures was not debunked in Spain till the time of the Napoleonic wars.

'Bigge, op. cit., p. 17. 137

The system of flock mangement in use in the mid-twenties had been described by Atkinson, and a comparison of his description with those given by Waterhouse and Wentworth shows that in the main it was simply a continuat­ ion of the system in use before the movement from the Sydney Plain began, though as Atkinson points out, at least one change in the method of shepherd­ ing had been made as a result of experience.

sheep are kept in flocks of about 300, each having its own separate shepherd. Wattle or hurdle gates made of split wood, with five bars, are used to enclose them at night. Three flocks are folded near to each other under the care of a watchman, whose business it is to watch them all night, to prevent any from being stolen, or injury from native dogs, and to shift the folds every day. The watchman is provided with a moveable watch-box, and usually two or three dogs, and generally keeps up fires all night . . . Great care is requisite to see that the folds are shifted every day, as it both tends to keep the fleeces clean and preserve the sheep in health. Some few persons still con­ tinue to enclose their sheep in yards at night, but the practice is very reprehensible; it is impossible to keep the yards clean, even if carefully swept every day, which is not always the case. An idea was once revalent, that it was dangerous to turn the sheep out in the morn­ ing till the dew was off the grass, but most of the graziers are now convinced there was no solid foundation for that opinion, and get their flocks out as soon as possible, and keep them out till dark.^

While the system of shepherding had^shown little change, there was one marked change .fcba ■ oyogi-all -frochnalogyi a-chango which gave pastoralism in New South Wales a distinctive feature during the period before 1851, namely, its continuing spread into new areas. As it operated at the time

Atkinson was writing, it meant that,

When any person finds himself overstocked . . . they go into the interior, or bush, as it is termed, beyond the occupied parts of the country . . . Having found a place suited to their purpose, with abundance of grass, well supplied with water, and, if possible, with

13 Atkinson, op. cit., pp. 74-5. 138

natural boundaries, such as thick bushes, rocky creeks, or impassable mountains, they make application to the Local Government for permission to occupy the same.^

The toofrnolagy of sheep-raising as it had evolved by the mid-twenties was based on two "equations": (i) that one shepherd was required for three hundred to three hundred and fifty sheep; and (ii) that three acres were required for one sheep. These represented the optimal combination of labour, land and "animal" capital: departures from it were regarded as retrograde moves, even if there was no clear evidence for such an opinion. The impl­ ications of the espousal of these optimality conditions soon became obvious for as sheep numbers increased, so the expansion in the area occupied took sheep-farming farther into the interior.^ The drought which began in 1827 and the decline in wool prices which began in 1826 and continued till 1831, showed the disadvantages of a technology emphasising increasing sheep numbers and the c on comiii titan t geographic expansion, and at the time when these difficulties were most evident colonists called for a revision in the basic premises. Some called for a complete re-thinking of the role of wool in the colony's economy while others less inclined to such a radical solution sought to overcome the difficulties by importing strains of sheep to further enhance the quality of their wool to obtain the same returns from a lesser 16 number of higher quality sheep.

Ibid. , pp. 64-5 ^Graziers moving their stock into new areas occupied an area sufficient to accommodate their present flocks and the increase they expected over a per iod of years.

See pp. 87-88. 139

The most ardent advocate of this scheme was Robert Dawson who was a

severe critic of the methods of sheep-farming used in New South Wales, which he saw as the product of the widespread ignorance in the colony of the prin­ ciples of sheep-breeding. In particular, he questioned the basic assumption

that it was the colony's climate which produced the fineness of the fleece, claiming instead, "climate will do a great deal in New South Wales, but it will not, unassisted do everything^ Basing his suggestion on this premise, which was the very antithesis of the much vaunted natural advantages thesis

then current in the colony, Dawson suggested that the way out of the difficulties

then besetting the colony was by adopting a system of sheep raising, based on

the practices then used in Germany which included housing sheep at night.

Dawson's remedy may have been logically defensible, but its adoption would have removed the very basis of the colony's wool industry by bringing product­

ion costs in New South Wales into line with those in Germany. For this reason alone his solution could not be considered by colonial producers, who,

The pressure to revise the techniques of wool production was eased and then removed when the drought ended, wool prices improved, and immigrants with capital reappeared. All t^races of pessimism soon disappeared, while talk of improving the quality of the fleece ended as average grades of wool began to fetch reasonable prices in the English market. Nevertheless the industry's problems were by no means ended for in 1831 colonists learned

17 Robert Dawson, The Present State of Australia, (London, 1831) p. 419. 140 that land was in future to be sold at auction with a reserve price of five shillings, while at the same time it was becoming obvious that the supply of shepherds in the colony was less than the demand.

There were many fears expressed and many complaints voiced when it was announced in July 1831 that the system of land grants was to end, to be replaced by land sales. To some degree the fears and complaints were ex­ aggerated, for the new regulations also provided for the leasing of crown land, while as it turned out, the inability and unwillingness of the local authorities to restrict the unlawful occupation of crown land meant that ready access to land was not to be denied to New South Wales sheep-farmers.

On the other hand the shortage of shepherds was to be a much more difficult problem, for while the land was there for the taking, labour had to be ob­ tained from Britain^and a government which was willing to accept the fait accompli of squatting could not be so readily moved to expend funds on importing the labour input required by the existing technology. This was certainly what graziers found during the thirties and forties, when they could readily occupy land but not so readily find the shepherds to watch the flocks they placed there.

This forced graziers to make adjustments in the only way the technology permitted, i.e., increasing the ratio of sheep to shepherds. There is evidence that such an adjustment was made in the early years of the thirties, for the Reverend J. D. Lang, writing in 1833, stated: "if the country con­ sists of open plains destitute of timber, as many as a thousand sheep are entrusted to a single shepherd; if it is moderately wooded, there is a 141

shepherd for very flock of three hundred and fifty." One of the

pastoralists who gave evidence to the Legislative Council Committee on

Immigration in 1835, stated that some sheep owners had been compelled

to increase the size of their flocks to eight hundred or a thousand and 19 had "sustained losses in consequence," ' but while other pastoralists

complained of a shortage of labour and even described private schemes

they had formulated to bring labour from Britain, they did not refer

to increasing $lock sizes. They generally agreed that two or three

thousand labourers were immediately needed in the colony but there was a

pervading feeling that the shortage would be quickly overcome once some

scheme of assisted migration was implemented.

Two years later many of the same witnesses gave evidence to the

committee of the Council appointed to examine British immigration and a

proposal to being Indian coolies to the colony; this latter proposal

signifying the extent to which a shortage of labour was then thought to

exist in New South Wales. The direct prognoses were made, the most pes­

simistic being John Edge Manning's contention that, "in one year from this

time, unless we have an importation of many thousand shepherds, this

Colony will have reached its acme of productiveness in wool; or that such

an evil may be delayed only twelve months longer by the neglect of agri-

J. D. Lang, An Historical and Statistical Account of the Colony of New South Wales, (London, 1834), p. 349. 19 Votes and Proceedings of the Legislative Council: 1824-37, p. 309. Evidence of Thomas Ryder. 142 culture, and the consequent endangering of human life." As other evi­ dence showed, agriculture was being neglected, but even so the number of shepherds was still inadequate and it was commonly reported that graziers had been forced during the preceeding year to increase the size of their 21 flocks from five hundred to a thousand or more It was further claimed that such large flocks could not be properly looked after, and fears were expressed that scab and other diseases would soon begin to decimate the colony's sheep. At the same time wages paid to non-convict shepherds had risen from L12 to L20 p.a. with rations referred to in 1835, to L25 p.a. with rations.

The most conservative estimate submitted to the 1837 Committee was that three thousand shepherds would be needed during the next year, if flocks were to be properly tended. Sheep numbers were growing; wages were rising; and wool prices declining, though the price of sheep was increasing rapidly.

The only solution pastoralists could see in the light of the circumstances, was a vast influx of free immigrants to bolster the size of the labour force in the colony, and the urgency of this was heightened, when in 1838 it was decided to end convict transportation to New South Wales. But even though twenty-five thousand free immigrants arrived in the three years preceding

1841, those who gave evidence to the Committee on Immigration held in that

20 Ibid., p. 648 21 By the mid-thirties five hundred was being spoken of as an acceptable size for flocks. See E. M. Curr, Recollections of Squatting in Victoria, (Melbourne, 1965), p. 21. 143 year painted a woeful picture of the condition of the wool industry Few of the immigrants who had arrived, they reported, had wanted to follow "the 22 lonely, monotonous, and indolent life of a shepherd," so wages for shepherds had risen to L30 per annum with rations, and flocks of a thousand or more sheep had become common, one pastoralist reporting that he was keeping his sheep in flocks of up to two thousand in an area of open country.

The quality of the fleece and carcase weight were declining because of the large numbers kept in flocks it was reported, because large flocks ruined a considerable amount of pasture around the site where the folds were set up.

(Large numbers of sheep being driven to and from their folds each day trampled down the grass and ruined the pasture for some distance around the fold, and this forced the sheep to travel further for pastures, with a consequent detrimental effect on fleece and body weight.)

The 1842 Committee on Immigration heard much less pessimistic reports than its predecessor^for wages had fallen to around L20 and the cost of rations from the L20 estimated in statements to the 1841 Committee, to around

L15. None of the pastoralists examined complained of a shortage of labour, and while some stated they were keeping their sheep in large flocks, this they explained by a desire to keep down costs rather than because of a shortage of labour.

The depressed conditions of the early forties made graziers cost-conscious so that while those who gave evidence to the 1841 Committee stressed the

22 Votes and Proceedings/ 1841, Report of the Committee on Immigration - Evidence, p. 12. 144 adverse effects of the shortage of labour on the quality of their wool; those, who gave evidence to the 1842 Committee principally expressed concern with how a shortage of labour had choked off the market for sheep; and those who appeared before the 1843 Select Committee on Immigration stressed the effect of high wages on costs, and consequently on their returns. This last investigation was conducted by a committee of the

Legislative Council which was partly elected, by a restricted franchise, and was dominated by elected members with pastoral interests. It found that,

were wages for shepherds reduced to an average of from L10 to L12 per annum, exclusive of, and in addition to, lodging, fuel, and liberal rations . . . the profits arising from the growth of wool would be sufficient to supersede the practice now had resource to, either of ceasing to breed stock, or of boiling down the surplus increase; and no sooner would profit be annexed to the pursuit of grazing, than the staple of the Colony (its flocks) would acquire a marketable value, and an impulse and activity be again com­ municated to colonial enterprise.^

The main impediment to this level of wages coming into being was, the committee found^that the several hundred then unemployed in Sydney were un­ willing to accept low wages because of sheer obstinacy, for the committee discounted the claim that country employers did not "duly" pay wages and that it was this which made labourers reluctant to accept rural employment.

Instead it accepted the assertions made before it? that it was intimidation by fellow workers which stopped many of the unemployed accepting jobs as

Votes and Proceedings: 1843, Report from the Select Committee on Immigration, p. 2. 145 shepherds. This refractoriness could soon be overcome, the committee felt, if the colony's labour force was increased by immigration, which would ensure a supply of cheap labour for wool production.

Throughout the remainder of the eighteen forties sheep owners continued to see their salvation in cheap labour; as one contemporary commented, by

"naturalizing in Australia the miserable wages of the southern counties of England and the Highland counties of Scotland," and by calling for the introduction of their "beau ideal of an emigrant ... an able-bodied single 24 man from an agricultural county - humble, ignorant, and strong." Their response to labour shortages and consequent high labour costs was to continue to call for the introduction of labour at governmental expense; free im­ migrants if available, and convicts when the supply of the former proved inadequate towards the end of the eighteen forties. Only in rare instances were suggestions made that the labour problem should, and could, be met by substantially altering the techniques of wool raising.

The other element of the technology - the extensive use of land - in comparison provided few problems for pastoralists during the eighteen thirties and forties. The price of land rose, but beyond the frontiers of location there was land which could be occupied at a trifling expense, for while the British government's policy was designed to restrict such occupation, the local governors allowed it to continue, for as Governor

24 Samuel Sidney, The Three Colonies of Australia, (London, 1853), pp. 128, 130. 146

Bourke expalined in a despatch written in October, 1835:

Admitting, as every reasonable person must, that a certain degree of concentration is necessary for the advance of wealth and civilization, and that it enables Government to become at once efficient and economical, I cannot avoid perceiving that peculiar­ ities which^in^this Colony, render it impolitic and even impossible to restrain^wittiin limits that would be expedient elsewhere. The Wool of New South Wales forms at the present, and is likely long to continue its chief wealth. It is only by a free range over the wide expanse of the native Herbage, which the Colony affords, that the production of this staple article can be uphe*ld at its present rate of increase in quantity, or standard of value in quality. The proprietors of thousands of acres already find it necessary, equally with the poorer settlers to send large flocks beyond the present boundary of location to preserve them in health throughout the year. The colonists must otherwise restrain the increase or endeavour to raise artificial food for their Stock. Whilst Nature presents all around an unlimited supply of the most wholesome nutriment, either course would seem a perverse rejection of the Bounty of Providence, and the latter would certainly require more labour than can at the present be obtained in the Colony, or Immigration profitably supply. Independently of these powerful reasons for allowing dispersion, is not to be disguised that the Government is unable to prevent it.

Beyond the policy prescription which the New South Wales governors were unwilling and, as Governor Bourke admitted, unable to enforce, the only hindrance to the continued geographic expansion of the pastoral industry lay in considerations of profitability. While the wool prices of the middle years of the eighteen thirties supported profitable expansion, they began to decline in 1837 and simultaneously the cost of production began to in­ crease. To the extent that these increased costs were due to increased labour costs, all the industry was affected, but graziers on the frontier of settlement, or those wishing to establish themselves in new areas, also

2~*HRA, Series I, Vol. xviii, p. 156. 147 faced an additional cost disadvantage because of the cost of freighting wool out of, and supplies in, to stations located at ever-increasing distances from the metropolis. By 1840 it was widely thought in New South Wales that the spread of settlement had reached the boundaries set by costs, and the reaching of this limit served to check the entry of new producers into the industry. There was however excess productive capacity in the area then occupied because graziers entering new areas generally claimed an area suffic­ ient to accommodate their present flocks and the increase they expected to accrue over a period of years. The area occupied in 1840 was therefore sufficient to sustain an increase in the number of sheep till this excess capacity was absorbed, when the need to expand into new areas would again appear. Then expansion was checked by the lack of profitability in the new areas, and the only way this check could be removed was by reducing costs, and since wages constituted the most substantial part of costs, the avidity with which pastoralists sought means of reducing wages from 1843 onwards largely reflected the reappearance of their need to expand geographically.

It might have been possible to increase the carrying capacity of the area occupied by improving pastures but, as Bourke pointed out, this would have required considerable amounts of labour, probably more than if continuing to use existing expansionary techniques of flock management. Fundamentally therefore the problem of ensuring the supplies of land required by the exist­ ing technology, resolved itself into that of obtaining a plentiful supply of labour to ensure lower costs: this was the major problem pastoralists faced in the thirties and forties. 148

The historian G. W. Rusden, when describing the prelude to the de­ pression of the early eighteen forties pointed out that drought conditions in the last two years of the thirties ruined many graziers, while for others,

absolute ruin seemed equally imminent whether the lives of sheep and cattle could or could not be preserved /For/ in those days all sheep were shepherded, and the wages of shepherds were a large item. The subsequent practice of fencing with more or less rough material had not been thought of, nor could it have been adopted without capital, /and7 capital was not in the land, /besides? the wild dog ^d not been poisoned at the time, and sheep were folded at night.

The intensity of the problem suggested by Rusden's statement raises the question, why graziers did not seek means of alleviating the problem of labour costs by adopting a different technology. This Rusden suggests was primarily because fencing "had not been thought of" though this explanation can be interpreted in two ways. It could be taken to mean that graziers did not consider fencing as a possibility, or it could be construed to mean that the methods of fencing, such as were adopted later had not been invented.

If taken in the former sense there remains the problem of explaining why graziers did not consider fencing as a practicable solution to the problem they faced: if taken in the latter sense, the claim is dubious.

The technique of "fencing with more or less rough material" referred to by Rusden, was what later came to be called brush fencing, which being the cheapest method, became the type of fencing most commonly used on New South

Wales sheep runs in the late eighteen fifties and the eighteen sixties. It was made by "cutting down the trees along the line of fence, laying down the

26 G. W. Rusden, History of Australia (London, 1897), Vol 11, pp. 184-5. 149 butts, as well as any dead timber which may be laying about as a foundation; and making it up to a height of four or five feet with the brush obtained from the trees just cut down," or by cutting down large trees, cutting off the main part of the trunk and then laying the remaining part with branches still attached, end to end along the line of fence so that the branches formed 27 the fence. The former method was the cheaper, and so the more commonly used, and its very simplicity makes it hard to believe that New South Wales graziers had not thought of it before the eighteen fifties, for more sophis­ ticated methods of fencing were then known and used in the colony to enclose areas of cultivated land. Alfred Joyce in the description of the sheep station he established in the eighteen forties referred to building "substantial 28 three-railed fencing around the cultivation paddock," while the fencing of sheep paddocks was a common practice in Van Diemen's Land in the twenties and thirties and methods used there would have been known to New South Wales graziers.

It is also possible to point to instances of pastoralists advocating the use of fences before 1851, and though such instances are rare, nevertheless they do repudiate any suggestion that suitable fencing techniques were not known.

Neil Black, a prominent Port Phillip settler advocated fencing from early in 29 the eighteen forties primarily as a means of improving the health of sheep.

27 P. R. Gordon, Fencing as Applicable to Sheep-Farming, (Sydney, 1867), p. 34. no A • J <3 jf te Gi Fi JuiiiL-j , A Homestead History. . . (Melbourne, 1949), p. 60. Butlin (op. cit., p. 71) erroneously claims the fence Joyce was describing was "to protect newly born lambs". Post-and-rail fencing had been used in New South Wales during Macquarie's administration. 29 Margaret Kiddle, Men of Yesterday, (Melbourne, 1962), pp. 199-200. 150

Charles Campbell in his evidence to the Legislative Council's Committee on

Immigration in 1841 suggested a scheme to save labour which involved sheep

farmers "within the boundaries" reducing the number of sheep they held, so

that "instead of one settler occupying 20,000 or 30,000 acres of land, and

the distance between the settlers' houses being, as at present, 8 to 12 miles,

they each occupy only 6,000 acres, and if their houses and farm yards be only

three miles asunder, native dogs will gradually be destroyed." Sheep could

then be left "for a portion of the day without a shepherd between the boundary

fences" (which he implies already existed), while at night there would be no need of a night-watchman so that there would be a saving of at least one-third 30 in the labour force required by sheep farmers. There seems therefore to be sufficient evidence to rebut Rusderfs contention that fencing "had not been

thought of" if it is taken to mean that fencing techniques such as were used

in the eighteen fifties, were not known in the thirties and forties.

There is a further feature of Rusden's contention which might be questioned, namely, his claim that the fencing in of runs was the only possible changq in the technology. There was one other possibility: a method later commonly used "on the plains where the necessity for fencing is not so very urgent*" as P. R. Gordon pointed out in the pamphlet on fencing he published

in 1867, for in these areas graziers break "the sheep in to a particular part

Votes and Proceedings: 1841, Minutes of Evidence taken before the Immigration Committee, p. 13. 151 or beat on the run, allowing them to camp out on the run at night . . and placing the shepherd's hut on an eminence, or so as to command a view 31 of nearly the whole of their beat." William Macarthur in 1855, advocated the adoption of a similar system in "less heavily timbered country*'^ primarily as a means of solving the then prevailing labour shortage, though he thought it would also be advantageous because it would stop the ruin of pastures around folds; it would mean less injuries arising from sheep being kept in a dense mass; and it would allow sheep to wander freely and therefore 32 ensure better feeding. Yet when in September 1843 Benjamin Boyd told the

Select Committee on Immigration that he insisted on the employees at his

stations in open country near the Murray River, "shepherding in flocks of 33 not less than three thousand, and camping them out at night without hurdles," and that the system had proved very successful, his claim was looked upon with some incredulity by most pastoralists, and even ridiculed. Some others were camping their sheep instead of folding them at night in the mid-forties, for McKenzie in his book The Emigrant's Guide, published in 1845, wrote of camping sheep at night as an acknowledged and tried remedy for catarrh in 34 sheep, while Edward Curr in his reminiscences stated that in the mid-forties he started "camping out sheep in place of hurdling or yarding them (a great

31 Gordon, op cit., p. 9. 32 Macarthur Papers, Vol 68, Mitchell Library. William Macarthur, "Notes on Wool", dated 1855. 33 Votes and Proceedings . . . 1843, p. 849. See also Samuel Sidney, Three Colonies of Australia, (London, 1853), p. 131. 34 McKenzie, o£. cit., pp. 100-1. 152 35 improvement, which I believe I was the first to adopt)".

Camping sheep had been used in the eighteen thirties when moving sheep from station to station, and it then involved settling the sheep down in a group at night, and surrounding them with small fires to keep the sheep in­ side and to keep the dingoes outside the first, but by 1850 the term "camp" 36 was used to mean keeping sheep together in a group. The practice of camping sheep at night as used by Boyd and Curr may have involved the use of small fires, but by the time Gordon was writing (i.e. the late sixties) it simply meant leaving the sheep unconfined and unattended at night. Even the former method would have saved a considerable amount of labour, as Boyd was quick to appreciate, and it was a method known and available to graziers facing rising labour costs, though it had only been used in open, lightly timbered country where dingoes were less in number, and less able to attack flocks.

This restricted its applicability to a fraction of the area where sheep were grazed in the early forties, while its use was further restricted because of the discomforts the method implied for those tending sheep. While a shepherd's hut had few enchantments, camping out with the sheep, as the system apparently required in the forties, had considerably fewer, so if graziers experienced difficulty in getting men willing to be shepherds in the established system, it would have been considerably more difficult to get men willing to tend sheep when it involved a completely nomadic type of life.

35 Curr, ££. cit., p. 162. 36 See the description of Australian squatting life in Chamber1s Edinburgh Journal, 1850, p. 318. 153

The limitations imposed by geographical factors and those implied in the nature of the method meant camping could be substituted for the shepherding- folding system only in a small part of the area occupied, and only if labour was readily available. Camping sheep could save labour, but paradox­ ically it was only possible when there was little need to save labour

Later the discomfort and disadvantages of the system were removed but as practised in the early forties camping -sheep could only be put into operation by ruthless employers such as Boyd.

In effect fencing was therefore the only possible change in the techniques of flock management which was capable of substantially reducing the amount of labour required for tending sheep. Since pastoralists were insisting that there was a considerable shortage of labour, and that this was a fundamental cause of their troubles in the early forties, it is perti­ nent to enquire why they did not think of using fences as a means of over­ coming the problem. If fencing was introduced in the fifties because of the shortage of labour which came about when shepherds left for the goldfields why did not the earlier labour shortages lead to such an innovation.

This question was considered by Gordon in his pamphlet on fencing, where 37 he traced the history of the pastoral technology in New South Wales. He pointed out that attacks of dingoes by night, and aborigines by day, had led to the establishment in New South Wales of "a system of close shepherding,

37 Gordon, ££. cit., pp. 3-4. The following quotations are taken from these two pages. 154 different from that pursued in older and more civilized countries;" a system which initially was made possible by the "facilities offered by the

Government in the shape of cheap convict labour*"^and which was continued, because after the early settlers had,

of necessity adopted it, those who followed in their wake, - principally men who before coming into the colony were total strangers to the management of sheep, - adopted the system which had been introduced by these pioneers, and which in the absence of any other system of management appeared to them to be all that was desired.

The system continued till the discovery of gold and the consequent disruption, inflated the price of labour and only then was "the idea of substituting fences for shepherds and hutkeepers (nightwatchmen) . . . entertained to any extent by our more enterprising settlers-"* Even so, after using fences for a time many graziers reverted to shepherding because they thought that the fencing system caused a decline in the lambing rate and sheep to become wild and rangy.

This reversion to shepherding suggests that graziers were essentially seeking better methods of flock management rather than simply solving the problems posed by an upsurge in labour costs when they tried fencing in the fifties. The shepherding-folding system had been regarded during the forties as a source of disease and as a cause of poorer pastures, and it may have been as a solution to these problems that fencing made its appearance. If it was these reasons which led to the change, there still remains the problem of explaining why no attempts were made to counter the spread of disease and to prevent pasture damage by introducing fencing in the forties. 155

Gordon's reference to fencing being "entertained ... by our more enterprising settlers" in the fifties, and to the shepherding system being maintained during the thirties and forties because of the inexperience of most graziers, suggests a lack of enterprise on the part of graziers as a primary reason for the lack of innovation. In this regard Strzelecki pointed out in 1846 that, "few improvements, either as regards the management of sheep, or of pastoral land, have as yet made their way into the colonies

. . . The reason is obvious: the majority of wool-growers in Australia is composed of persons whose occupation in England was not that of a sheep- 38 farmer, which is a science, as well as any other." In particular the

Billy Barlows who became graziers during the boom of the eighteen thirties knew little of the practical problems involved in sheep-farming, let alone anything of the principles of sheep-breeding What little they did know of its practicalities, was generally garnered by working, as did Samuel Rawson, for an established grazier for a time, most of whom in turn had previously learned their craft in a similar way. According to Graham in his treatise on the Australian merino, there was a marked deterioration in the quality of sheep in the colony after the mania for sheep-farming attracted so many

"gentlemen who had not the slightest idea of stations, sheep, or their 39 management" to New South Wales in the latter half of the thirties. And a similar suggestion was advanced by Duggan, who claimed that only one third

38 Strzelecki, ££. cit., p. 368. 39 J. R. Graham, A Treatise on the Australian Merino, (Melbourne, 1870) p. 15. 156 of the sheep stations in New South Wales in the late forties were well managed, and that there had been a marked decline in the quality of colonial wool from 1835 onwards: both of which deficiencies he attributed to the influx of 40 inexperienced persons into the wool industry during the eighteen thirties.

It could be argued in the light of such comments that the colony's sheep farmers were not technically competent and that no technological response was made to the problem of labour shortages before 1851 because those affected by them were not able to fully appreciate the advantages of a change in technology. Against this, it could be contended that graziers showed a propensity to accept innovations in that they were ready to resort to the boiling-down of sheep for tallow when its discovery was announced in

1843. There were however two important differences between accepting boiling-down as a process able to alleviate a short-term crisis of severe intensity, and accepting measures designed to relieve the long-term malaise as presented by labour shortages/. 0oiling-down involved no outlay by the owner of sheep, and its returns had been clearly demonstrated before it was accepted; those expected to be derived from fencing were not quantitative­ ly known. The ready acceptance of boiling-down might not therefore be cited as evidence of a general responsiveness in the wool industry to consider or adopt technological change, for beyond other considerations it is possible that this responsiveness simply reflected a greater intensity of the stimulus.

^T. B. Duggan, Essay on Catarrh in Australian Sheep, (Sydney, 1848) pp. 29-33. While pastoralists giving evidence to the various Legislative Council committees held from 1835 onwards to investigate the need for immigrants, unequivocally complained of a shortage of labour, it is possible that some degree of exaggeration crept into their claims,' if for no other reason than to goad the government into immediate action. Furthermore, assuming that their claims concerning a general shortage of labour are correct, it is possible that such a shortage affected various regions differently. If so, any possible stimulus to changes in flock management inherent in a labour shortage could have affected frontier areas more severely while conditions in such areas were less favourable to innovation. In fact this appears to have been the case, for censuses taken during the forties show that while between forty and fifty per cent of the shepherds in the colony resided within 41 the limits of location, between two-thirds and three-quarters of the sheep were then to be found in squatting areas (i.e. outside the limits). The ratio of sheep to shepherds was therefore considerably higher in squatting 42 areas than in settled areas throughout the forties, during which period the ratio for sheep to shepherds in the whole colony increased. While the differences in the ratio as between squatting and settled areas narrowed as the forties progressed, at the end of the forties the labour shortage

41 —. - e.g. the 1846 census lists 5,462 shepherds out of a total of 13,565 as occupied within the limits of location, while the 1851 census shows 6,715 shepherds in squatting areas out of a total of 11,449. 42 Settled areas is used here to mean areas where land had been purchased or granted i.e. where the grazier had a freehold title. 158

(as reflected in the different ratios) still affected squatting areas more than settled areas. According to the 1841 census there were 12,948 shepherds in New South Wales; in 1846 the census showed 13,565 shepherds; and in 1851, 11,449 shepherds: during the same period the sheep population tripled. Even taking into account the fact that the 1841 census overstated the number of shepherds in New South Wales because of its failure to clearly differentiate between persons employed on sheep stations as shepherds and those employed in agricultural and other duties, the growing shortage of shepherds during the eighteen forties is obvious. Whereas in 1843 there was a ratio of one shepherd to approximately 450 sheep, by 1846 the ratio stood at one shepherd to 580 sheep, and by 1851 (even before the discovery of gold), at one shepherd to over one thousand sheep. As the shortage of shepherds grew, even though the proportion of shepherds in squatting areas increased^ the shortage of shepherds was felt more keenly there. In terms of the distribution of sheep and shepherds as between squatting and settled areas, the ratio of sheep to shepherds in squatting areas would have been more than double that in settled areas till after 1846. Before 1846 the ratio of sheep to shepherds was between 300 to 500 to one in settled areas; a ratio which, it may be claimed, did not impose any undue strain on the existing technology. After 1846 the average ratio of sheep to shepherds for the settled areas grew more quickly than that for the whole colony and this imposed strains on graziers depasturing their flocks in settled areas, which previously had been experienced only in squatting areas.

The shortage of labour complained of by graziers from 1835 onwards primarily affected the squatting areas. There were two possible responses to this problem: either to maintain the existing framework of the system 139 of flock management and increase the number of sheep in each flock, even though it was recognized this expedient involved producing poorer quality wool, spreading disease, and damaging pastures; or to adopt a fundamentally different system of flock management which used less labour but avoided

the pitfalls of simply increasing flock size. If the latter course were decided upon, graziers could either camp sheep out at night so removing

the need for a nightwatchman, or else fence in their runs, but the former technique had a number of limitations which severely reduced its applica­ bility. Fencing was the only innovation of widespread applicability but it could not be considered as a possibility in squatting areas; not, as it was claimed, primarily because dingoes made the folding of sheep at night and their shepherding by day necessary, for though the method of eradicating them by strychnine poisoning was known, it was not seriously considered nor widely practised; but primarily because of three drawbacks in the squatting system itself.

Fundamentally fencing could not be considered as a solution to the labour problem in squatting areas while squatters had no fixed tenure of 43 the land they occupied, and this they did not have till 1847. Secondly, even if squatters would consider fencing as a possibility, it is doubtful whether prior to 1843, when the legal framework of the system of borrowing using the wool-clip of livestock as security was created, they could have obtained the requisite capital, for during the years of depression in the

43 "to have thought of surrounding the vast areas of the different squattages by substantial enclosures in the face of the uncertain tenure of the occupant, seemed entirely out of the question." (W. Westga'th, The Colony of Victoria, (London, 1864), p. 267). 160 early forties this would not have been possible, while in the years immediately previous to its onset, though there was a considerable amount of capital in the colony, its flow into pastoral activities was restricted by the command over it of Sydney merchants. Thirdly, it is doubtful whether squatters wanted to consider fencing, or for that matter any other possible improvement, for their main interest lay in the ex- ploitation of the pastures they temporarily occupied.

The stimulus for a change in the technology of wool production first appeared during the latter half of the eighteen forties in settled areas where^it is suggested, a technological revision was a more likely response.

The system of shepherding therefore continued throughout the period to 1851, not because there was insufficient pressure to warrant a change in the technology, but because this pressure was felt in squatting areas where a technological revision was not possible, fw Yke very nature of squatting precluded the replacement of the folding-shepherding methods by fencing; at least not until squatters had some legal command over the land they occupied.

Because the basic elements in the techniques of wool production had to remain unchanged in New South Wales during the period before 1851, pastoral- ists had to continually seek to obtain land and labour in ever larger quantities. They argued, as did most colonists, that the prosperity of the colony depended on wool, its staple production; this in turn,on the increase in its flocks which required, in terms of the optimal fixed coefficients postulated, ever more labour and land. The deficiencies in this line of 161 argument were clearly shown at various times but nevertheless colonists persisted in advancing it, simply, it is contended, because they recognized that it was not wool which was the basis of the colony's prosperity, but sheep a distinction whose significance becomes clearer when the costs and returns of wool production are examined. 162

CHAPTER V

SHEEP FARMING: COSTS AND RETURNS

Statements such as, "wool made Australia a solvent nation," are based

on the premise that sheep farming was profitable during the thirty years

preceding 1851; not constantly profitable throughout this period, for it

is recognized that there were two periods of depression, but such state­

ments suggest that outside these two periods, sheep farming returned

handsome dividends which attracted many immigrants and much capital to

New South Wales. Most books about New South Wales published in the

'thirties and 'forties referred to the high profits made in sheep farming

in this period, though there are a few which suggest that if profits were made, they were not made from the production of wool but from the

sale of sheep to persons attracted to the colony by claims concerning

the high profits to be made. If this is so, it would help explain much concerning the character of the development of the industry and

the nature of the political demands graziers made during the 'thirties

and 'forties..

Nearly all of the books written about New South Wales during the

period contained some description of the profitability of sheep

farming, generally presented in such a way as to suggest to potential

immigrants with money that they could do nothing better than to

establish themselves as graziers in New South Wales. The first to

include such a section was Wentworth's book in the edition published

in 1820, where in a section devoted to describing "the advantages the

colony offers for emigration," he claimed, concerning the breeding of

fine-woolled sheep, that "of all the various openings, which the 163 world at this moment affords for the profitable investment of money,

there is not one equally inviting, as this single channel of enterprize,

He based this contention on two series of calculations of the profits

which might be expected by a sheep farmer during the first three years

of operations in the colony; in the first series assuming that he

bought and raised fine-woolled sheep, and in the second, that he raised 2 "the coarser sort of sheep*". To calculate the return for fine-woolled

sheep Wentworth made the following assumptions: (i) that fine wool

from mature sheep sold at four shillings per pound, and that from lambs

at 2sc9de per pound; (ii) that the fleece from a mature sheep weighed

on average two and a half pounds, and that from a lamb, one pound;

and (iii) that the sheep were kept in a flock of about 330, A flock

of fine-wool sheep of this size with the requisite number of rams would

cost, he estimated, El,000, while during the first year the cost of a

shepherd (E50), hurdles (E40), shearing (E8 5s,), and freight etc,

(£41 3s,2^d.) would amount to E139 8s.2Jz;d, The wool clip for this

first year would return E199 17s,5iz;d,, leaving a profit on the wool

alone of E60 9s,3d,, while the increase in the flock during that year would be worth E263 10s,, assuming that the 330 ewes produced 330

lambs (165 wether lambs worth El each and 165 ewe lambs worth E2 each);

that the value of the 330 ewes originally purchased declined by ten

shillings per head; and that there was a five per cent overall death

rate in the flock. Carrying forward the same assumptions and adding

"Hj, C, Wentworth, A Statistical, Historical and Political Descrip­ tion of New South Wales (London, 1820), p, 441. 2 The calculations are set out on pp, 446-451 of Wentworth's book. 164

a further one that the value of the lambs born in the first year would

appreciate by ten shillings in the case of the wethers and twenty in

the case of ewes during the second year; and five shillings in the case of wethers in the third year, when the ewe lambs born in the first year were added to the breeding stock, Wentworth arrived at figures

for the profits for the second and third years of operations„ For

the second he calculated that there would be a profit of E120 18s,6^;d0

for wool and E458 10s,9^d, appreciation in the value of the flocks, and

for the third year a profit of E181 0sc4%d. for wool and E585 9so8^d, for stock,

Wentworth's calculations for fine wool production take into account all the possible changes in value, and cannot be faulted because of omissions: the only obvious one is that he took no account of in­ terest payable on the capital initially outlaid for the sheep, but then he assumed that "the emigrant has the means of purchasing a flock" and so does not consider interest as an outlay. The calculations do not fail therefore to take into consideration any outlays, nor do they underestimate the magnitude of any of them, but Wentworth did over­ estimate the returns which might be expected. The method Wentworth used to calculate the increased value of the sheep might be questioned, though the figure thereby established for the value at the end of the 3 third year is reasonable, granted the assumptions he adopted. It is,

3 If the five per cent death rate and the rates of depreciation of the original stock and of appreciation of the lambs Wentworth uses, are applied to the 330 sheep originally purchased, to establish the number of sheep at the end of the first, second and third years, and if these re­ sults are then valued at the prices Wentworth quotes, the value of the flock at the end of the first year would be El,256, at the end of the second El,702 10s», and of the third, E2,4750 This would give an in­ crease in the value on the original purchase of El,475, instead of the El,307.10sc6do arrived at by Wentworth. however, the assumptions which he used in this calculation which are suspect, for he assumed a lambing rate of one hundred per cent and that only five per cent of the lambs die before the end of the year, which contrasts with the lambing rate of between sixty and eighty per cent shown in returns for John Macarthur's flocks for about the same time as Wentworth was writingo Allowing a lambing rate of eighty per cent would reduce the appreciation in the value of the flock by E200 or more which would still mean that the value of the sheep at the end of the third year was double the original outlay, though this was only a paper profito If the sheep farmer was concerned with covering his current costs by current returns the situation would be very different, for during the last few years of the Macquarie era, the period with which

Wentworth was concerned, only a very small percentage of the New South

Wales wool clip was fetching four shillings per pound. Most was being sold at prices around half this figure, which would mean a loss on wool production in terms of the level of expenses outlined by Wentworth though the loss on wool production could be covered by the sale of wether lambs.

The production of coarse wool produced smaller returns according to Wentworth's calculations. The grower would actually lose E39 9s„6d. on the production and marketing of this wool clip for the first year,

E51 2s. for the second, and E63 18s.T^d. for the third, but the appre­ ciation in the value of his livestock would more than cover these deficiencies, so that he could expect a return on the capital he originally invested of nearly twenty per cent in the first year, fifty-seven per cent in the second, and seventy-six in the third: returns only slightly less than the comparable returns for fine wool production. But again the bases of Wentworth's calculations migtit be 166 questioned, so that while the prospects of sheep farming in Australia as depicted by Wentworth looked entrancing, any person beguiled into

this occupation would have quickly found how misleading they were.

Those attracted to the colony in the early 'twenties, thinking they were going to make a fortune raising fine wool, as was suggested by

Wentworth, would have found the prices of fine-woolled sheep rising, the prices of wool declining, but fortunately, as a result of Bigge’s recommendation that convicts should not be paid a wage, the cost of

labour declining; though not by so much as to offset the changes in

the other two elements in the situation,,

By 1826 the price of the best cross-bred ewes was between E4 and

E5 each, and that of pure merino rams between E15 and E25, while at the same time the price of wool had declined substantially. Cunningham recognized these changed conditions,yet in his book, Two Years in New

South Wales, which was first published in 1826, he claimed that "about

2s. per pound may be fairly calculated as the average profit which our 4 principal wool growers derive after paying all the expenses*"» He did not mean that this was the return over and above all costs in­ volved in the production and marketing of fine wool, for he maintained that "money derived from flocks is always considered clear gain, because the other proceeds of the farm will more than defray all the ordinary farm expenses after you have got matters a little advanced upon itx"?

This may have been the case for long established wool growers, the

4 R, Cunningham, Two Years in New South Wales (London, 1828), p. 265.

5Ibid. 167

experience of one of whom Cunningham used to obtain the figure of "2sc

per pounds")for he derived this figure from the returns Hannibal Macarthur

received for his wool in 1824, In that year Macarthur received El,258

14so8d. for the 9,273 pounds of wool he sold, which represents an average

price of 32^d0 per pound from which must be deducted 6d. per pound, the

amount allowed by Cunningham for "the expense of shearing, packing,

freight, insurance, and brokerage," which left slightly over two shillings per pound as profit, as Cunningham reckoned it. If, however, Cunningham had taken Macarthur’s returns for 1823 or 1825, he would have arrived

at a net figure of 19^d, and 14^d. per pound respectively, which would not have justified his contention that the average "profit" on wool production was about two shillings per pound. Furthermore, if the costs

of producing the amount of wool Macarthur sold in 1824 are taken into

consideration, the return on the wool above these costs would amount

to something in the vicinity of 3d. per pound,^ while if the same level

of costs are assumed to have been in existence in 1823 and 1825, the

"principal wool growers" would have incurred losses on their wool pro­

duction for these years. This situation would scarcely justify Cunning­ ham's claim that in sheep farming, "the three first [sic] years are the

only ones of positive outlay to an active judicious man . . .but these

once overcome, the remainder (so far as pecuniary matters are concerned)

are all years of sunshine and pleasure*"# Unless the sheep farmer was

able to sell some of his wethers to the butchers, or some of his ewes

£ This has been calculated using the costs Wentworth estimated but reducing the cost of a shepherd to E30 p.a. which was the approximate cost of rationing and clothing a convict.

^Cunningham, op. cit., p. 266. 168

to new graziers, he would find that sheep farming was a losing proposi­

tion, but while in 1826 the prices in the latter market were buoyant,

those in the former were declining.

The high profits to be made in sheep farming were also a theme in

Atkinson’s book on New South Wales agriculture and grazing, published

in 1826o He did not present, as had his predecessors, any calculations

of profits which he thought were "undoubtedly very considerable, and probably exceed those to be obtained from any similar way of employing g money at present open to the public," but he added the comment:

"Without meaning to question the general correctness of some [calcula­ tions] that have already been laid before the public, I must confess that I have little faith in calculations of that description, as, after all, the realization of the expected gains must depend upon the care, activity, and judgement of the undertaker, and a single error may en- 9 tirely frustrate all his brilliant hopes," While Atkinson expressed scepticism concerning the utility of the calculations of Wentworth and

Cunningham, without impugning their accuracy, two authors of books concerning New South Wales, published in 1829 and 1831, made remarks pertaining to such claims, which questioned their accuracy and the reasons for their being made.

The first of these authors was Wakefield, who in his Letter from

Sydney— the product of his careful reading of the books that had been written on the colony—devoted several pages to "The Wool Question."

There he wrote:

g J. Atkinson, An Account of the State of Agriculture and Grazing in New South Wales (London, 1826), p. 80. 9 Ibid. 169

You ask me in particular, whether the emigrant to New South Wales, having capital, may expect to make large profits by the growth of wool? In direct opposition to the ruling idea of my fellow colonists, I answer—No ....

Still, you say, large fortunes have been made in New South Wales by breeding sheep„ Unquestionably; but if you inquire into the causes of that fact, and look at its effects, you will not mention it again as an argument in favour of the speculation < , . .Our rich sheep farmers owe their fortunes, not so much to the high price, in proportion to the cost of production, which they have hitherto obtained for wool, as to the monopoly which they have had of an article still more in demand than wool itself—namely, fine-fleeced sheep. Mr. Macarthur, for instance, who was the first to perceive how admirably this country is suited to sheep farming, made more money by the sale of sheep to his fellow colonists than by the sale of fleeces to the wool-staplers of London .... But the advantage that he, and others who followed his example, enjoyed for some time, has already exhausted itself0 The supply of sheep for stock is already equal to the demand; a great fall in price has ensued; and as sheep increase much faster than people, there is no chance of an alteration favourable to the flock-owner „

The second was Robert Dawson, who in his book, The Present State of Australia, published in 1831, made similar statements, claiming that "profits, which if they ever did exist, have long since gone by,", and that such "profits" had been earned from their sales of old and inferior livestock to newcomers, and not from the production of wool.^"

The price of sheep had subsequently declined because the newcomers had in turn bred sheep and sold them in the local market; even so, Dawson warned anyone thinking of coming to the colony to seek their fortunes in sheep farming, that while the price of sheep was lower than pre­ viously, so also was the price of wool in the London market, while the prices "of every article that he has to purchase are by no means diminished

^E. G= Wakefield, Letter from Sydney (London, 1829), pp. 79, 83- 85 o

■^R. Dawson, The Present State of Australia (London, 1831), pp. 418-419. 170 12 in a corresponding ratio/', But Dawson's was the only book written by an author with first-hand experience of colonial conditions, which sounded a sombre note concerning the profitability of sheep farming.

Breton, in the preface to his book describing his experiences in the Australian colonies during the late eighteen twenties, stated:

"It must be obvious to every impartial person, who has had an oppor­ tunity of judging from actual observation of the capabilities of the

Colonies, that most of the works hitherto published are calculated to excite in the emigrant expectations which, unless through some singu- 13 larly lucky circumstance, can never be realized." These exaggerations

Breton attributed to the authors being established in the colonies, thereby implying that they were deliberately misleading would-be 14 immigrants so as to enhance the value of their own property. This was the purport of Dawson's contention and was perhaps implicit in

Wakefield's, but are such claims justified? Could it not be that

Wakefield and Dawson were simply being wise after the event? That the marked decline in wool prices after 1826 and the drought which struck the colony in 1827 could not have been foreseen, and that

13 Lieutenant Breton, Excursions in New South Wales, Western Australia & Van Diemen's Land (London, 1833), pp. i-ii. 14 A similar charge was made by Thomas Hamilton when reviewing Cunningham's book in Blackwood's Edinburgh Magazine, November, 1827. Hamilton accused Cunningham of "puffing" New South Wales, adding: "Mr. Cunningham . . .has, we believe, become proprietor of a con­ siderable property in the colony. Thus interested in its prosperity, it was natural, and perhaps excusable, that his delineations of men and manners in the country of his adoption should be as bright and captivating as a due regard to probability would allow." (Quoted by D.S. Macmillan in his Introduction (p. xl) to the edition of Cunningham published in 1966.) 171

previous to their onset wool production was profitable and the grazier

did not have to depend on sales of livestock for profits? It would

appear not; at least judging from the data Wentworth and Cunningham pre­

sented to prove the converse^ it would seem that the returns from wool

did not generally cover the current costs of producing and marketing ito

Wool of a superior degree of fineness, such as was produced by John

Macarthur, should have returned sufficiently high prices to cover costs,

but most of the wool raised in New South Wales fetched prices at the

London auctions which did not recompense the grower for his outlay on

shepherds, equipment (hurdles to enclose the sheep), shearing, freight,

and marketing, let alone return him anything on the capital he had

initially invested in sheep. It was on the increase in the size of

his flocks that the grazier had to depend to balance his ledger, but

even here this increase in turn involved further outlay, for there were no economies of scale within the existing technology. More sheep

required more shepherds and more land, and even if prior to 1831 land

could be obtained at little or no cost, such as was available to accom­ modate the expansion of flocks was ever further from Sydney, and so

involved a higher cost structure, which if anything made a grazier even more dependent on sales of sheep.

There was #n consequence a consciousness in the colony of the

degree to which its progress depended on a continuing flow of immigrants bringing capital which is reflected in remarks Governor Bourke made in

the opening speech for the 1833 session of the Legislative Council, ! when he said:

Cultivation is extending; in many branches of Agriculture the rate of profit has advanced; and Capital, prudently invested, obtains here a return unknown in other countries. This fact will not long escape the attention of the wealthy Capitalists 172

in Europe; whilst the great increase in the number of free Emigrants, of the middle classes, who arrived here from Great Britain in the last year, without any assistance from Government, shows that the advantages which this colony pos­ sesses over most of the known countries in the world, are beginning to be generally felt, and to attract to its shores an orderly and industrious population ^

While ever the profitability of sheep farming in general depended on in­ come from sources other than wool, there was no inducement to improve the fleece, though it was claimed in the late 'twenties that this would increase the returns from wool, and place New South Wales in a better position in 16 the English wool market vis-a-vis the then main supplier, Germany.

Such attempts to improve the fleece would also slow down the rate of growth of sheep numbers and to this degree stop the spread of settlement with its concomitant increasing costs, but such a change would neces­ sarily involve the sacrifice of immediate financial gain. Later, the increase in prices for average grades of wool during the first six years of the eighteen thirties, and the prices livestock created by the flow of middle-class immigrants, made sales of both wool and sheep profitable.

It was these conditions Strzgelecki had in mind when he wrote that

"the extraordinary profits which the mere increase of the flock, and the quantity of wool, realised" meant that the "greatest numerical amount of sheep . . . [gave] the best of all possible results,".

Wool prices reached their peak in 1836, declined sharply in 1837, and thereafter continued their downward trend till 1844, with slight recoveries in 1840 and 1842, During the last four years of this period the wool—growing industry was experiencing severe distress and

~^Votes and Proceedings ... 1824-37, Part II, pp. 67-68.

■^Cunningham, op, cit., Vol. I, p, 265. See also Dawson, op. cit., p. 419. 173 evidence given to various Legislative Council committees during the currency of these conditions stressed the degree to which the industry’s embarrassment was due to the drying up of the market for sheep. This does not necessarily imply that wool production was of itself unprofit­ able during the late thirties, though it did face increasing costs arising from a number of sources; in particular, the costs of labour increased considerably as the number of sheep continued to grow at a faster rate than that of the labour supply available for their tending. A simple calculation such as that presented by Balfour superficially suggests that wool production in the late thirties, using convict labour, gave

"favourable results*"^/ He demonstrated this by assuming that it would require two convicts to take care of one thousand sheep whose fleeces would weigh on average two and a half pounds. If then the wool clip sold for two shillings per pound,the total return would be E250, from which had to be deducted E30 for rations for the two convicts, E14 for

"shearing, wool packing, and washing^"; and E6 for "assessment on 1,000 sheep, carriage, commission, &c„«", which left an income of E200 for the wool from the thousand sheep, while "sales of fat wethers, or other sheep, were additions to this income

There is a more detailed calculation presented in the Australian 18 Magazine for February^ 1838, which shows the returns which might be expected from the purchase of two thousand ewes and sixty rams: assuming a lambing rate of seventy-five per cent (half being ewe lambs); a death rate of five per cent; that no five-year-old sheep

■^J. A. Balfour, A Sketch of New South Wales (London, 1845), p. 93. 18 Australian Magazine, February, 1838, pp. 135-144. was kept in the flock; that the wool was sold for an average price of ls,6d. per pound in the first year, which price thereafter increased at the rate of a penny per pound each year; and that new rams were bought and put into the flock each two years. These assumptions imply that the station was managed extremely efficiently; certainly far more efficiently than the usual squatting run was managed in the late

'thirties when the influx of inexperienced persons into wool growing was blamed for a decline in the quality of the fleece. In terms of the assumptions made for this calculation, the returns on the wool pro­ duced by the two thousand sheep and the lambs born at the first lamb­ ing of the first year (the calculation provided for two lambings per year) was E489 7s.6d., and the expenses for the twelve men employed on the station, etc., E700; in the next year the wool would return

E765 18s.9d., as against expenses of E700; and in the third year

£1,087 10s. as against expenses of £700. The E700 expenses figure was supposed to represent an average of the expenses which would be incurred over a period of years, and while it might exceed the actual outlay for the first year, thereafter, even assuming that only con­ victs were employed as shepherds, it would appear that the current expenses would quickly exceed E700 per year, for with the increase in sheep numbers by the end of the third year, the number of shepherds etc. required on the station would be at least twenty-five (if the station was to be managed at a constant level of efficiency) and the cost of rationing twenty-five convicts would be E550 (according to the data accompanying the table of calculations), to which has to be added costs of freight, commission, hurdles, licence fees, etc.. While therefore this estimate is modest in the level of returns for wool it 175

includes, the rate of increase of sheep it uses, and the average weight

of fleece it employs in the calculations, it possibly tends to under­

estimate the costs involved in running the hypothetical station. Never­

theless on a station run along the lines suggested in the calculation,

the returns on wool alone have covered the current costs, but it should

be noted that this would only be so, if only convicts were employed;

if there were no interest payments to meet on money borrowed for the

original purchase of sheep; and if the sheep were pastured in squatting

areas. If these conditions were not met, or if the price obtained for

the wool did not continue to increase at the rate of a penny per pound

per year, a grazier operating a sheep run even as efficiently as the

assumptions in this calculation imply, would have had to cover a

deficit in his returns by selling his surplus sheep.

An estimate made by T, Potter McQueen in a pamphlet published in

1840 showed a return of E287 for the wool produced from a flock of a

thousand ewes costing E218 to maintain during the first year of opera­

tions, and a return of E339 as against an outlay of E234 in the second.

This estimate was based on the following assumptions: (i) that the

average fleece weight was three pounds; (ii) that the lambing rate

was ninety per cent; (iii) the death rate in the flock was five per

cent; (iv) that a price of Is.3d. per pound was obtained for sheep’s

wool, and 2s. for lamb's wool; and (v) that the sheep were depastured

in the squatting areas so that no purchase of land was entailed. On

an initial outlay of E2,850 for sheep and equipment, the grazier would

therefore, according to McQueen, receive from the sale of wool and

surplus sheep a return of nearly twenty-five per cent, but again there would appear to be a complete understating of the expenses involved, 176

e.g., he quoted E25 p.a* as the cost of a shepherd, yet in 1839 free

shepherds were being paid E20 to £25 p.a. plus rations which would 19 bring their total cost to something nearer E35 to E40 p.a. Adjusting

his cost figures accordingly, would reduce the return over costs for

wool in the first year to a maximum of E19 and in the second to E35;

both of which sums would be absorbed, if the average fleece weight was

reduced to the two and a half pounds, the weight then usually quoted.

Edward Curr who took over the sheep run in the Port Phillip dis­

trict in 1841, found:

As regards the wages current on the station, they were as follows:

Overseer, per annum E 100 0 0 Three shepherds, at El per week each 156 0 0 One hutkeeper do. do. 52 0 0 Bullock driver do, do. 52 0 0 Overseer's servant, per annum 40 0 0

In addition, I also found that the following outlay would be necessary:

A team of bullocks, with dray, &c. 100 0 0 One mare (already purchased) 75 0 0 One horse 55 0 0 Twenty rams (those which had been on the run having been destroyed for scab) 80 0 0 Rations for eight persons, flour being E60 per ton; and tea, and sugar, and tobacco at corresponding rates 200 0 0 Yearly license of run 10 0 0 Assessment on 2,100 sheep 815 0 Sheepwashing, shears, woolpacks, &c. 12 0 0 Shearing 2,100 sheep 21 0 0 Dressing materials for scab and foot-rot 10 0 0 Expenses, travelling and unforeseen 100 0 0

Total estimated expenditure for the year El,07115 0

19 T, P. McQueen, Australia: As She is and as She May Be. (London, 1840), p. 35. At the time McQueen was writing it was known that the transportation of convicts to New South Wales was to be terminated. The E25 p.a. he quoted would exceed the cost of rationing a convict but would be less than the cost of employing non-convict labour. 177

Against this outlay, the only asset to be looked forward to was the wool on the sheep, which might be estimated at the price of lSe per lb6, each sheep yielding about 2^ lbs., which brings out E262 Is., which would leave a deficit, if everything went on well, of E809 14s. —certainly a very charming prospect for a beginner!20

Even removing from Curr’s list of expenses items of non-recurrent expen­ diture would still leave a considerable deficit, which would only be covered if the price of wool was nearly three shillings per pound. On the other hand, it could be argued that the wage rates and ration costs

Curr quoted were far higher than those generally prevailing, as cited before the 1841 Committee on Immigration. There the wage most often cited as that paid to shepherds in 1841 was E25 p.a. plus rations which were estimated to cost another E15 to E25 depending on the situation of the sheep run. Reducing the level of labour costs as itemized in Curr*s list to accord with those given in evidence to the 1841 Committee would give a total cost for recurrent items, which would only just be covered if the price obtained for wool was slightly above two shillings per pound.

The impression left by estimates such as that made in the Australian /tab Magazine, that made by McQueen, and that made by Curr, is^sheep farming in the late 'thirties and early 'forties would only return reasonable profits if there was some sale for surplus sheep: the sort of situation

David Monro reported in his comments on the state of New South Wales in

1842, when he claimed that the returns from wool barely covered the cost of its production on very efficiently managed stations and that generally it took sales of wool and wethers to cover costs, while any profit made was from sales of sheep for stocking new stations. Monro

20 E. M. Curr, Recollections of Squatting in Victoria (Melbourne » 1965), pp. 20-21. 178 was particularly referring to the conditions existing in the early eighteen forties, but does not make clear whether his statement was meant to apply to the whole of the sheep industry, the squatters, or just the settlers who ran sheep on land which had been bought. There were considerable differences between the costs squatters faced, those faced by persons who bought land in the eighteen thirties, and those graziers who ran sheep on land granted under the regulations in existence before 1831.

Again there were marked differences between the costs involved in employ­ ing free immigrants to tend sheep and those arising from the use of con­ victs as shepherds, while sheep farmers paying high interest rates on capital borrowed for the purchase of either sheep or land had consider­ ably higher costs than those not using capital borrowed in the colony.

These cost differences, stemming from the sources of land, labour and capital employed, were related in general to the time at which the grazier had established himself in the industry. This also determined the siting of the sheep run: the later the run was established, the farther it would be from the metropolis, and consequently the higher the level of the costs of production on it. As a general rule those who received land grants during the eighteen twenties or before would have had more ready access to supplies of convict labour, and would also be less dependent on borrowed capital. In contrast, those graziers who formed part of the influx into the industry in the thirties most often used borrowed capital; were forced to depend more on free immigrant labour than their earlier counterparts; and instead of receiving grants had the choice of buying land or squatting beyond the then farthest frontiers of settlement<, This meant that besides the increase in the general level of costs arising from a shortage of labour and from the 179 increase in the proportion of non-convict labour which had to be employed— increases which all graziers faced from late in the thirties—many or most of the new graziers of this period had also to meet higher costs arising from their use of locally borrowed capital and the situation of their station0 While Monro's contention that the profits of sheep farm­ ing in the early eighteen forties depended on the sale of sheep would have been undoubtedly true of the likes of Billy Barlow, was it also 21 true of those of longer standing in the industry?

Judging from evidence pastoralists gave to the 1841 and 1842

Legislative Council Committees on Immigration, it would seem that this dependence was nearly universal in the industry. The general complaint made to the 1841 Committee was that there was no market for surplus sheep; but opinions as to the results of this varied. Some contended that the increased cost of labour and the lack of a market for sheep had made the industry absolutely unprofitable: this was the evidence of William Lawson, who claimed that in 1840 he had incurred a loss of

£2,000; of Major Lockyer, who explained that in his own case, he had had to ship a thousand sheep to Valparaiso to try to get some immediate return from his stock; of Captain P. P. King and Stewart Ryrie. Robert

Scott was of the opinion that sheep farming could be profitable but only on unpurchased land, or in open country where sheep could be run in large flocks, while George Cox and Edward Hamilton both stated that sheep farming was profitable but was returning less than ten per cent on the capital invested: Cox claiming that it returned only five per cent; Hamilton that sheep farming on a large scale returned less than

21 See Balfour's statement quoted on p. SBSUt. 180

ten per cent, the current rate of colonial interest. Lastly there was

T. A. Murray who sought to demonstrate the overall position of the wool

industry by the use of an arithmetical calculation. He claimed that wool exports in 1840 amounted to 7,668,960 pounds which, at an average

price of sixteen pence per pound, would give a total return of 23 £511,264, while an average fleece weight of two and a quarter pounds would mean that the volume of exports was produced by 3,408,426 sheep.

Allowing one shepherd to 750 sheep in each flock, one nightwatchman

for two flocks, one overseer for six flocks, would mean that 3,408,426

sheep required 4,544 shepherds, 2,272 nightwatchmen and 757 overseers.

Murray put the cost of these at E50, £45 and £60 per year respectively which gave a total labour cost of £374,860, while the cost of shearing

the sheep (four shillings per score), £34,084; washing, £11,502; wool bales (31,054 at ten shillings each), £15,977; carriage (fifteen shillings per bale), £23,965; and licence fees of £4,733, brought the total cost of producing the wool, in Murray's reckoning, to £465,121, which he pointed out was exclusive of the expense of building huts and making hurdles etc., and of the interest on capital. But while Murray's estimates were to show the precarious position of the industry, at

first sight it might appear that he was overstating his case by exag­ gerating the cost of labour, by (i) valuing it all at the highest rates quoted as then being paid in the colony; and (ii) assuming that all the labour employed was non-convict. It might be argued that

22 Hamilton's evidence suggests that sheep farming on other than a large scale was unprofitable. 23 Wool exports in 1840 were actually higher than this figure, but the calculation proceeds consistently on the basis of the lower figure so that the volume of the exports used in the example is not of con­ sequence for our purposes. 181

reducing the costs to remove this exaggeration would enhance the returns

from wool, shown in Murray’s calculation, to be about ten per cent. But

this figure was obtained by assuming that the average flock size was 750

and that there were therefore 7,573 persons employed in the industry, but the average flock size in 1841 was two-thirds & that used by Murray,

and the number employed would be therefore fifty per cent more than he

postulated. Assuming that Murray’s high average labour cost figure is balanced out by his low estimate of the number employed, and allowing

the validity of the other elements in his calculation, would mean that

the colony's production of wool netted ten per cent above the costs of

labour, packing, freight and licence fees, but, as Murray stressed, his calculation did not provide for all the costs involved. His example would seem to simply illustrate what other witnesses suggested: that

in 1841 a squatter unencumbered by debt might just cover his costs by

the sale of his wool; but that any grazier, whether a squatter or a settler, who had to pay interest on borrowed capital would find the

costs of production exceeded returns from wool.

Though the general level of wages had declined by 1842, pasto- ralists appearing before the Committee on Immigration in that year

claimed that wool growing could at best just cover costs and then only on carefully managed stations. Consequently there were no profits in sheep farming because there was no market for "surplus stock" due to the unwillingness of persons with capital to migrate to New South Wales, which the committee found was attributable to the increased price of crown land.i j 24

Henry O'Brien of Yass, the "discover" of the benefits of boiling

Co u^c* ( ^Governor Gipps re* 7k«s c* *f>?ecL 4o

cjeiuereri owv <7 Septetlo«rr 'SVr- 182 down, in his evidence contrasted the prosperity of the six years before

1837 when there was a large influx of monied immigrants, low wages, good wool prices and governmental purchases of meat, with the years after

1837 when wages increased, meat purchases declined, wool prices fell and the arrival of monied immigrants began to taper off. His evidence sug­ gests that it was not simply a fall in immigrant's demand for livestock, but this fall combined with other changes which caused the profitability of sheep farming to disappear,,

The only solution the 1843 Select Committee on Immigration could see for this situation was to reduce wages of shepherds from the E18 to £25 reported as the prevailing rates in 1843, to E10 to E12: only this could give "the staple of the Colony (its flocks) ... a marketable 25 value." Significantly perhaps, it was the colony's flocks, not its wool, which the committee named as its staple, so that while the reduc­ tion in wages would create a profit margin in wool production, it was the effect the lowering of costs would have on attracting new entrants to the-industry, which was stressed by the committee. The lack of immigrants with capital was also the factor emphasized by the wit­ nesses who appeared before the 1844 Select Committee on Crown Land

Grievances to explain the difficulties sheep farmers were experiencing, 26 yet the general level of costs in 1844 was lower.

A calculation made by Balfour, using data which he claimed was representative of conditions in 1844, suggested that wool growing was then of itself profitable, for it showed:

25 Votes and Proceedings . . . 1843, p. 798. Report from the Select Committee on Immigration, p, 2. 26 Balfour, opa cits, p„ 95. 1,000 fleeces at 2^ lbs, each, say at Is. per lb, E 125, 0 0 Wages for two men at E15 each E30. 0 0 Rations for ditto at E12 each 24, 0 0 Disbursements for shearing &c. 14, 0 0 Assessment on 1,000 sheep, carriage of wool, commission charges, &c0 6,0 0 74 o 0 0

Income in 1844 from 1,000 sheep E 51, 0 0

A calculation presented by C„ P, Hodgson in his reminiscences published

in 1846 showed the deceptiveness of simple calculations such as presented by Balfour, Hodgson claimed that the initial outlay for a station to run 28 20,000 sheep would be:

20,000 sheep at 6s, per head E6,000. 0 0 36 working bullocks at E7 252. 00 3 drays complete at E23 69. 0 0 8 horses at E14 112. 0 0 Expense of farming head station, huts, wool shed, barn, paddocks, hurdles and other necessary out-houses 1,500. 0 0

E7,933. 0 0

..* . and the annual expenses incurred for the maintenance and keep of 20,000 sheep:

Superintendent E100, overseer E35 E 135. 0 0 Cook E23, storekeeper E25, 2 farm servants E20 88. 0 0 20 shepherds and watchmen at E20 400. 0 0 3 bullock drivers and 1 mate E30 120. 0 0 Rations for 30 souls at E12 each 360. 0 0 Wear and tear of 3 drays, equal to one 23. 0 0 Loss of bullocks equal to one team yearly 70. 0 0 License £10 assessment on 20,000 sheep 96. 0 0 Washington, 10 men at 5s» per diem for 24 days 60. 0 0 Shearing 20,000 sheep at 3s. per score 150, 0 0 Pressing, 3 men at 5s, per diem for 24 days 18. 0 0 150 wool bags at 8s. each 60. 0 0 4 doz, shears at 3s. 7. 4 0 200 hurdles annually at E7 per 100 14. 0 0 Repairs of buildings, &c. 50. 0 0 6 extra men at lambing time at 12s. per week for 8 weeks 28.16 0

^^Ibid.# p. 96.

28 C. P, Hodgson, Reminiscences of Australia (London, 1846), pp. 59-62. 184

Decrease of stock at 2 per cent by casualties and accidents 120. 0 0 Commission on £3,000 the produce of wool 150. 0 0 Freight to Sydney, from the station, of 150 bales of wool at 10s» per bale 75, 0 0 Travelling expenses, household luxuries, grog for shearing, proprietors' time 200. 0 0 Freight home of 40,000 lbs. of wool at l*£d° per lb. 208. 6 8 Interest on outlay of £7,933 at 8 per cent per annum 632.13 0

£3,063 6 4

. , .By comparing the annual profits, a balance may be struck off, thus:

20,000 fleeces of wool weighing on average 2 lbs. each, and sold at the rate of ls.6d. per lb. £3,000. 0 0 Annual sale of 1,000 wethers at the boiling down price of about 5s. per head 250. 0 0

3,250. 0 0

Deduct annual expenses, time, and interest 3,063. 6 4

There remains in the Squatter's favour £ 186.13 8

Hodgson's calculation of costs was the most detailed of any presented

in books and pamphlets published prior to 1851. It shows that even with

the lower costs existing in the mid-forties the returns from wool on a

large station where one shepherd was allowed for each thousand sheep just

about covered costs including interest on capital at the current colonial rate of interest. It could be argued, however, some part of the costs set out by Hodgson arose from the scale of operations described in his

calculation; that on a smaller station there would be no need of a superintendent (manager) or storekeeper. This may be so, but the rate of wages for labour; the cost of a grazing licence; the fees for the assessment on stock; and the cost of shearing, freight and depreciation would be the same for smaller flocks.

The amount of labour needed for shepherding, washing, shearing etc. a thousand sheep would also be the same, and except for the 185 management costs involved in Hodgson's calculation (which would add about a penny per pound to the average cost of producing wool), the cost of producing a pound of wool would be the same (all other factors—e.g., distance from Sydney—being equal) on different sized sheep stations for there were no economies of scale0

Hodgson calculated the returns which could be expected on wool at

Is. 6d, per pound which would be a figure far beyond the average price of wool during most of 18440 Wool prices fell between 1842 and 1844, then news of some recovery in sales in London in mid-1844 reached the colony in late 18440 They rose in 1845 and again in 1846, but late in

1846 fell and continued to fall till 1849. While prices fell labour costs, though lower than in the 1837-41 period, rose causing pastoralists considerable concern. The 1845 Select Committee on Immigration ex­ pressed their fears when it stated:

Seven-eighths of our exportable produce consist of wool, and whatever affects the cost of its production must have the most direct and intimate relation to the interests of the Colony,as well as to those of Great Britain. A reduction in the price realized by this commodity, or an increased expenditure in the cost of its production (whether arising from exorbitant wages or any other cause) must strike at the root of our prosperity, as destroying our export altogether, or as rendering the cost of its production equal to, or exceeding the prices realized for it, in the European market.

It is with much anxiety, that your Committee have learnt that there is a considerable augmentation in the rate of wages, of pastoral and agricultural labour, over what has prevailed for the last two years . . . .The worst apprehensions are felt as to event of a fresh supply of labour not being procured, and • . .if wages become higher the flockmaster will be com­ pelled to resort to the boiling down of his stock.29

Boiling down provided a means from 1843 onwards, of covering defic­ iencies in the returns from wool, so when wool prices declined the number

29 Votes and Proceedings . .. 1845, p. 602. Report from the Select Committee on Immigration, p. 2. 186

of sheep slaughtered for boiling down increased, and vice versa. But

it was not simply declining prices but also rising wages which severely

troubled pastoralists in the second half of the eighteen forties, so

that witnesses appearing before the Select Committee on Immigration in

1845 and 1847 called for increased immigration to lower the high rate of wages which they claimed were undermining the profitability of sheep

farming. They did not go so far as to explicitly claim that the returns

from wool did not cover costs but the inference was always there, Pos­ sibly the situation was best summed up by Westgarth, who in referring

to the influx of persons to the gold fields in the early eighteen fifties, stated that they brought to the squatter "what his success greatly de- 31 pends on, a ready market for his surplus livestock/".

Looking back over the three decades preceding the discovery of gold it would seem that Westgarth*s statement could be applied to most years in this period: that only in a few years were the returns on wool then sufficiently high to cover its costs of production; and that otherwise graziers depended on the sale of their surplus livestock for their profits,, From 1837 till 1851 wool prices showed a downward trend while wages, in an industry which was becoming ever more depen­ dent on the more costly non-convict labour, showed an upward trend, except for the years 1843-45 when the movement on both prices and

Official Wool Price No. of Sheep Boiled Down 1844 lloSdo 127,280 1845 13o9d0 85,377 1846 14o9d, 33,538 1847 13c6do 128,741 1848 13c Odo 165,701 1849 10c6do 393,071 1850 12o0do 292,416

■^W. Westgarth, The Colony of Victoria (London, 1864), p. 266« 187 wages were temporarily reversed to the relief of graziers0 This does not mean that there were no profits in sheep farming in these fourteen years: just that such profits as were made depended on the disposal of surplus livestock; between 1837 and 1840, by selling them to immigrant

capitalists or to South Australia; and after 1843 by boiling them down,

or exporting them to New Zealand or even South America.

After 1837 there were frequent and widespread complaints concern­

ing the profitability of wool production: before 1837 there were fewer such complaints, yet, except for the years 1834-36, it is doubtful if

returns from wool covered expenses. Sales of surplus livestock seem

to have been not only desirable, but for the bulk of the sheep farmers in the colony, necessary. Admittedly there were considerable dispari­ ties in the level of costsoof sheep farming, ranging from the lowest costs associated with squatting and the use of convict labour, to those where free immigrants were employed as shepherds on purchased

land, but even in the former case, the much vaunted fortunes made in sheep farming were more the product of sales of sheep than of wool,

Fundamentally, the profitability of sheep farming in New South Wales was determined by the market for sheep, and this created an emphasis on quantity rather than quality, which meant that pastoralists had to ensure an ever-increasing flow of immigrants, and a ready access to land for the colony's increasing sheep numbers. Creating a favourable environment in which their flocks could increase and which would attract monied immigrants to New South Wales to purchase this increase, were the two major problems faced by the colony*s pastoralists, and these problems they sought to solve by forcibly shaping government policies to their own ends. 188

CHAPTER VI

Sheep-farming and the Government

The viability of sheep-farming in New South Wales depended upon attracting immigrants with capital to invest in an industry for which the colony was held to be peculiarly suited by its climate and by the ready availability of cheap land and labour. Such were the advantages cited by

Wentworth in his bid to divert to Australian shores the stream of emigrants flowing to North America in the early eighteen twenties He pointed out

that in the Australian colonies "a fine climate and a rich soil are united with a cheap and abundant supply of labour," while land could be obtained

"gratuitously from the Crown, in . . . proportion to the capital /possessed?

. . . at the very small expense of the fees payable upon obtaining the deed of grant.Twelve hundred acres of land cost L5 18s. 4d. in Australia,

E300 in Upper Canada and at least E540 in the United States: labour costs 2 were between a quarter and a third those in Canada or the United States.

It was with these advantages in mind that Wentworth made his calculations of the handsome profits of fine wool production in New South Wales available

W. C. Wentworth, A Statistical Account of the British Settlements in Australasia, (London, 1824), Vol. II, pp. 95, 99.

^Ibid., p. 101. See also S.H. Roberts, History of Australian Land Settlement, (Melbourne, 1924), p. 34n. 189 3 to those arriving with capital, or at least some pretense thereto. To

preserve this attraction there had to be cheap land and cheap labour.

During most of the period the cost of labour depended upon the comparative

rates of growth of the number of sheep and of convicts in New South Wales,

and therefore on the supply of immigrants. The cost of land depended upon

the British government policy. Though during the 1820s this policy entailed

raising the cost of land its implementation proved impossible^to the benefit

of the pastoral industry.

The cheapest way land could be obtained was in the form of a gift--a

grant from the government. This system involved problems, in particular,

there was a need for some criteria to ensure that the recipients had the

capital to fully utilise the land, and, secondly, there had to be some

provision for making pastures for the expanding flocks of settlers who had

previously received land grants. When faced, at the beginning of 1821,

with an influx of immigrants wanting land grants, Governor Macquarie

sought the advice of the Surveyor-General, John Oxley, "as to the number

of Acres of Land, which might be deemed adequate to the capital proposed

While the size of the land grant was proportional to the new settler's capital, there were numerous fraudulent claims concerning the amount of capital introduced. Governor Macquarie complained in 1821 of a common practice whereby immigrants arrived with merchandise obtained in England on credit which they were to sell and then remit the original cost to the English supplier. On arrival in the colony these immigrants claimed owner­ ship of all the goods they brought so as to bolster their claim for land, but the actual amount of capital they had available for investment was simply the profits they made on selling the merchandise. Complaints about this practice continued to be made throughout the eighteen twenties, i.e. through­ out the period when the size of land grants was linked to the amount of capital 190 to be invested in Agricultural pursuits in Settlers, arriving from England."

Oxley suggested that two thousand acres should be the maximum grant "except upon special occasions, and under particular circumstances" and that the size of the land grant should be fixed in accordance with the amount of capital brought to the colony-persons bringing "E500 /should receive/

500 acres; E750, 640; El,000, 800; El,500, 1,000; . . . E3,000, 2,000," but added:

I should have considered the number of Acres allotted to the several Capitals ... as far too few to carry on with success an extensive grazing concern, more particularly in sheep, if I did not entertain hopes that, sanctioned by your Excellency's recommendation, government might be induced to permit such Settlers, as might be inclined to purchase from the Crown an additional quantity of Land (adjoining) to the Farms they may receive on account of the Capital employed, not exceeding three times the amount of such Grants, upon such terms and conditions, as may prove equally advantageous to the Crown and Individual Purchaser. 0 Macquarie reported in November^ 1821, that to formalize procedures for granting land to new arrivals, he had laid down a scale with two thousand acres as the maximum grant - "that quantity of land being full as much as any Individual can have occasion for, either for the purpose of Grazing or

Cultivation for many years." He thought some special provision had to be made for persons arriving with more than E3,000 so proposed that they be allowed to purchase land for ready cash at a price of ten shillings per acre

4 HRA, Series I, Vol xii, p. 185.

^Ibid., Oxley stated that this scale "approximates to the quantity of Land at present granted to the Individuals, to whom it refers."

HRA, Series I, Vol x, pp. 568-9. 191

for the best land and seven shillings for other land.

Macquarie did not put this scheme for land sales into operation before his departure from the colony at the end of 1821, so the system

of land alienation Brisbane inherited provided for land grants apportioned

to the amount of capital introduced for immigrants; grants to persons

already owning land in the colony to accommodate the increase in their herds or flocks; and licences to graze livestock on Crown lands. He

soon found Macquarie's liberality a source of embarrassment for settlers,

expecting this largess to continue, constantly applied for new grants -

"not a Cow calves in the colony but her Owner applies for an additional g grant in consequence of the increase of his stock," Brisbane reported.

Faced with these incessant demands Brisbane decided he "had to discover

some measure by which they might be reconciled with the Superior interests 9 of the Crown" and so decided in April^ 1822, that in future for each hundred acres of land granted, the grantee was to maintain one convict

free of expense to the government while liable to pay, as before, a quit

rent of two shillings per hundred acres.

The introduction of this measure created considerable dissatisfaction

in New South Wales and gave rise to prophecies of impending ruin, but as

^Bigge suggested that land could be sold at ten shillings per acre for land in a good situation and five shillings for other land.

HRA, Series I, Vol xi, p. 182

HRA, Series I, Vol. x, P- 630 192

Brisbane so rightly observed in November7 1823, "Clamour is nowhere a long liver; and its day is past here already."^ Earl Bathurst was not so easily placated, nor was he convinced of the practicability of the scheme. Instead he suggested the imposition of a quit* rent of one and a half per cent of the estimated value of the land payable from the 11 sixth year of occupancy. Brisbane defended his own scheme, pointing to the 107 grants made during the preceding eighteen months and to the advantages of having the convicts usefully employed by settlers rather than kept by the government in the convict-barracks which, like Spanish 12 monasteries"contain a population of consumers who produce nothing."

Brisbane made a further alteration in land alienation procedures by instituting in November, 1823, a scheme for the sale of land. He intro­ duced this measure because he thought that "the liberality of the Crown

/cannot? keep pace in extending Grants with the increase of Stock."

Two thousand acres of land were required for six hundred sheep and sheep 13 numbers doubled each two years. Since the government could not be expected to continue granting land to accommodate this increase, Brisbane

^HRA, Series I, Vol. xi, p. 183.

^Ibid., p. 84. On the basis of good land being worth then shillings per acre (as provided in Macquarie's scheme and Bigge's report), this rent would amount to fifteen shillings per hundred acres.

12Ibid,, pp. 181-3. HRA, Series I, Vol xii, p. 390.

^HRA, Series I, Vol. xi, pja. 330?l. 193 saw the only solution in what Macquarie and Bigge had advocated, namely, the sale of land, the proceeds of which would constitute, in his opinion, a revenue for the colony. The land was to be sold at five shillings per acre (some better lots were sold at 7s. 6d. per acre), with ten per cent of the purchase price payable immediately and the remainder in three years.

A purchase could only be made with the permission of the governor, and the regulations further laid down that no individual could purchase more than four thousand acres of land, and no family more than nine thousand acres: restrictions which would have limited the utility of purchases under these regulations for pastoralists, for four thousand acres would accommodate only twelve hundred sheep.

Warrants for the purchase of 263,860 acres of land at five shillings, 14 and 2,250 acres at 7s. 6d. per acre, were issued in 1824-5, but three years later many of the purchasers, including some of the wealthiest persons in the colony, found they were not in a position to complete the payments. They memorialized the governor explaining that, when the purchases were made,

"high prices had been obtained in the English Markets for Wool" which led them "to indulge sanguine expectations of a continued advantageous return".

So they had been "induced to acquiesce in the high value of Five Shillings per Acre affixed as the price of the Lands then sold." The subsequent decline of "at least fifty per cent" in wool prices and drought had con­ siderably diminished their optimism, and they therefore asked if the land could not be granted to them or, if this was not possible, that they be given extra time to pay. Governor Darling could not accede to the first request,

14 HRA, Series I, Vol xiii, pp. 236-7. Elsewhere Darling reported that 334,000 acres had been sold by Brisbane (HRA, Series I, Vol. xii, p 380); and that 558,110 acres had been sold between May and December, 1825, (HRA, Series I, Vol. xiv, p 346). 194 for as he explained: "His Majesty's Government has laid it down as a Prin­ ciple that Land can be granted only in proportion to the available Capital which the Applicants possess, and that Persons in Debt to the Government can therefore have no claim to additional Land." However, he agreed that they be given extra time to make their payments, provided they paid "the

Colonial Interest of the time when each Instalment becomes due."^

Both of Brisbane's changes entailed an increase in the cost of land in the colony, as did Earl Bathurst's instruction, published in New South Wales on November 5, 1823. This increased the too quite rent on new grants from two shillings to fifteen shillings per^acres.

Since it was felt that settlers could not pay the new quit* rent and at the same time maintain convicts as required by Brisbane's regulations, the latter was made an alternative to making improvement. A settler receiv­ ing a grant of a hundred acres had either to clear and cultivate twenty acres, or erect "buildings, fences or other permanent improvements" to 16 the value of L100, or maintain five convicts. Still wishing to spare the government the expense of maintaining convicts, Brisbane introduced a regulation in November, 1824, whereby an additional hundred acres of land would be granted for each convict maintained.^ By the end of his adminis-

^HRA, Series I, Vol xiv, pp. 206-9.

^HRA, Series I, Vol. xii, pp. 381, 391. 17 Ibid., pp. / 403, 827. 195 tration there were, therefore, (a) the grants promised by Governor

Macquarie and still being surveyed on which a quit^ rent of two shillings per hundred acres was payable; (b) the grants made by Brisbane with the maintenance of convicts provision, on which a quit£ rent of two shillings was payable; (c)those on which there was a quit/? rent of fifteen shillings per acre which Brisbane made under the regulation issued in November, 1823; 18 and (d) those made under the regulation issued in November, 1824. The system was complicated but the significant feature was that the cost of land was increased by these regulations. Fortunately for pastoralists the issuing of grants was delayed because of the lack of surveyors, so that settlers were allowed to occupy unsurveyed land under the ticket of occupat­ ion system instituted by Governor Brisbane.

By this system livestock owners could go into the interior, select an area and then apply to the government for permission to occupy it.

This permssion, or ticket of occupation, as it is termed, is always granted upon paying a trifling fee; and conveys to the stock-owner a right to occupy a tract usually extending two miles in every direct­ ion from his stockyard; always holding himself in readiness to quit at six months' notice from the Surveyor-General . . . This ticket of occupation system has been of material advantage to the stock- owners, by giving them the free use of the natural pasturage at a cheap rate, but it has also been attended with many disadvantages The occupation of the country by new Settlers has . . . been so rapid that the graziers have fouij^ themselves continually impelled further on into the interior . . .

1 R Ibid., p. 381 19 J. Atkinson, The State of Agriculture . . . (London, 1826). p. 65. 196

This movement brought with it problems of management, and of additional 20 expense of "sending the neces&ary supplies . . . such a long distance," nevertheless "the system of tickets of occupation not only helped the government to make land quickly available to the stock-owners but it 21 also fostered the spread of settlement." The extent to which it did, may be seen in Figure 3.

Governor Darling was given detailed instructions concerning new 22 procedures he was to institute for the alienation of land. They provided

that (i) all "waste and unoccupied Lands" were to be valued by a Board of

Commissioners appointed by the governor; (ii) when the valuation of an area was completed, the average price was to be published for one month when tenders for the purchase of land in the area could be submitted, "the highest offer, which shall during such month be made for any such Lands,

shall be accepted, provided that such offer shall at least amount to the 23 beforementioned average price;" (iii) if after six months land had not been sold then, and only then, it could be granted to persons applying for grants. No quit rent was payable on purchased land while on granted land a quite rent equivalent to five per cent of the value of the land (as estab­

lished by the Land Board) was to become payable after six years, subject to the provision that this rent could be redeemed within twenty years of receiving the grant by the payment of an amount equal to twenty years'rent.

Credit towards the purchase price and the redemption payment was to be given

Ibid

T. M. Perry, Australia's First Frontier, (Melbourne, 1963), p. 34. "HRA, Series I, Vol xii, pp. 115-124. Ibid 119. Figure 3

—

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N EY/ SOUTH Y/'ALK S THE

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CV'\f3£*U.\D Pi A :/ 3 S'tu: f/j/vy sc U fa/

fa C/t r,.-?r Vj/.'ry C> /BPS

/ -c it: an's ![|.. fa t/jpyjrr.i Co . f/f | | P . o' - * * SA /C 3 Sgr-j'jf $■V..\ /»-;r *; y £',» / yr.' n . *

LAifaS MS CO By r.'C'Sr nr CiCvS ■■'??# MS fc:. ,r> Ct‘c;e t3rur/.r.'Cj ^ © fsofateJ runs O /sc’.'it/ runs, p i : i

Source: T. M. Perry, Australia's First Frontier, (Melbourne, 1963) 198 for supporting convicts at the rate of thirty-two shillings per convict per year, and if a purchaser could show that within ten years he had re­ lieved the Treasury of an amount equal to ten times the amount he had paid for his land then this amount would be repaid to him, while a grantee would be appropriately credited for the support of convicts if he shose to redeem the quit rent. Darling's instructions further provided that land was to be sold in lots of 1,920 acres with no person being allowed (except by special permission of the governor) to purchase more than 9,600 acres, while the minimum land grant was to be 320 acres (except in the vicinity of towns) and the maximum 2,560 acres; the size being regulated by the amount of the applicant's capital.

Darling assumed office as governor on December 19, 1825. Early in

January^ 1826, he referred that part of his instruction "relative to the 24 disposal of lands in New South Wales" to John Oxleyy for comment, and then in February referred Oxley's report (dated January 26, 1826) and the relevant part of his instructions to the Land Board for comment. It returned its report in two parts, the first on February 23 and the second on March 11, 25 1826.

Oxley's report was endorsed by the Land Board which added criticisms of the changes in land alienation procedures set out in Darling's instruct­ ions and of some of the existing colonial procedures. Both reports stressed

24 For Oxley's comments, see HRA, Series I, Vol. xii, pp. 379-89

^Ibid. t pp. 402, et seq. 199 the adverse effects of the proposed changes on immigrants arriving "with moderate capital," for under the new regulations such persons could only be granted land which remained unsold six months after tenders for its purchase had closed. This meant that, having waited the requisite time, new settlers unable to purchase land would receive land of an inferior quality 2 6 or land which had been considered over-valued by potential purchasers.

Since the quit rent on land grants was to be five per cent of its value, grantees would be eventually paying dearly for the land they received. At the same time the proposed regulations opened the way for "speculators and land jobbers" to engross the better land and have settlers at their mercy when the need for land to accommodate the increase of their flocks 27 arose. Such considerations led Oxley to claim that the proposed changes would be "little less than ruinous to the free Settler from the Mother

Countryx"^an opinion echoed and amplified in the Land Board's report, where it was stated:

If no Lands, but those found unsaleable, are granted to such Settlers, they will find it impracticable to obtain any,excepting Lands of a very inferior description, which added to the delay, occasioned by waiting until Lands shall have been exposed to sale for six Months, would prove ruinous to their prospects, and would deter instead of attracting to the Colony a class of Persons, whose Emigration it is obviously good policy to encourage by conceding to them every fair

2 6 See Oxley's comments. Ibid., pp. 385-6, where he pointed out that the quality of land could vary considerably within a parish yet one valuat­ ion was to be given for each parish. See also p. 416. 27 Ibid., pp. 385, 419-20. Comments in the Land Board's report seem to have been aimed particularly at emancipists such as Samuel Terry. 200

and reasonable advantage.

In the light of these circumstances Oxley suggested that new settlers should be allowed to select land in areas "at present partially settled . .

. not beyond certain limitations of distance and Surveyed Country," and that until "the general Survey is so far advanced as to admit the valuation of particular Parishes in the aggregate, the lands for the purpose of Rent might be valued at 3s. per Acre, being, at 5 p. Cent., a quit Rent of 15s. T per 100 Acres," (the quit rent for new grants announced on November 5, 1823)

He also suggested that the ticket of occupation system should be examined, pointing out that it would (i) "obviously diminish the Sale of lands to a very great extent;" (ii) prevent the progress of the survey of the colony;

(iii) stop "the improvement and enclosure of the granted lands by providing additional pasture without exertion or or Commensurate outlay of Capital;" and (iv) thwart attempts to improve the quality of the colony's livestock.

Yet Oxley did not advocate the termination of the system, simply suggesting that holders of such tickets should be required to pay a rent equal to the quit rent on granted lands.

The Land Board went much further, recommending that all existing tickets of occupation should be cancelled and new licences involving the payment of a rent of fcl per hundred acres be issued to persons approved by the governor. It also called for an end to the indulgences granted for supporting convicts who were now in short supply, and further proposed

OQ Ibid., p. 416 29 Oxley thought that this over-valued the land citing the fact that the Australian Agricultural Company's land was valued "by His Majesty's Government at only Is. 6d. per acre. (Ibid., p. 387.) 201 that "approved Free Settlers of moderate Capital" should be allowed select land in partially settled areas, or in areas specially set aside for land grants. The Board referred at length in its report to the dangers of land speculation and to counteract "the pernicious tendency of monopolies of Land" recommended regulations for the sale of land which provided, as in Darling's instructions, that all land had to be surveyed

1 then publicly advertised, but which further provided that persons already owning twenty thousand acres shall not be allowed "under any pretence whatever, to make a further purchase of Crown Lands," and that the governor's permission was required for submitting tenders for the purchase of Crown

Land. The emphasis in the Board's report was on making "Allotments of moderate extent" available to "those classes of industrious and respectable

Settlers, who would either reside on their Properties in Person or entrust 30 the management to Relations or Overseers of respectable Character.*" and on preventing the machinations of "Speculators and other designing Individ­ uals, "who were all apparently emancipists, who could not be considered

'respectable'- as the term was then used in New South Wales.

Darling sought the advice of his Executive Council in June^ 1826, on a number of questions concerning land alienation, including whether his instruc­ tions on this matter were imperative; to which question the Council replied that to prevent the ruin of persons arriving in New South Wales expecting

30 This is how the Board interpreted the object of Darling's instructions. (Ibid., p. 420.) 202 immediate land grants it was necessary to deviate from these instructions.

The Council suggested new settlers should be permitted to select land within 31 32 certain boundaries on the basis of 640 acres for each L500 capital. The

Council further recommended the immediate withdrawal of all tickets of occupation. In future persons wishing to temporarily occupy land were to pay LI per hundred acres per year.

New regulations setting out procedures for land grants and purchases were published in a Government Order on September 5, 1826. Those concerning the purchase of land were substantially as set out in Darling's instructions: those concerning land grants were substantially of local origin, being not just a modified version ,but a nearly complete revision of Darling's instruct­ ions. Even so the new land grant regulations were hostilely criticized in the colony; the five per cent quit rent being depicted as a device which would add to "the further depression and derangement" of the colony's 33 prosperity, and as yet another illegal tax.

31 The boundaries as laid down on July 19, 1826, were: Port Stephen to the Wellington Valley in the north; the Macquarie River and a direct line to the latitude of Bateman's Bay in the west; and Bateman's Bay and a line due west to the 149th meridan, in the south, (ibid, p. 378). Darling suggested moving the western boundary further westward on August 22, 1826: the Executive Coun­ cil took the opportunity to set new boundaries, which were published on Septem­ ber 5, 1826. They were from Cape Hawke due west to the Wellington Valley, the River Macquarie to the 33rd parallel, from that point westward to the 148th meridian, then directly south to the Lachlan River. From there due east to Campbell's River, along that river until it reaches the latitude of Bateman's Bay, then due east to the bay. This boundary represented the limits of the area settled by 1825 (see Figure 3). The limits of location were expanded and redefined in October, 1829, to include the nineteen counties (see Figure 4). 32 The Land Board had suggested this scale to replace the retrogressive scale originally suggested by Oxley in 1821.

~^HRA, Series I, Vol. xiii, p. 54. Figure _4

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*, V^j •, V \ £ > /' ~ ~'-x * !i I J § ROXBURGH \ \ Af yif' \ _,r! 1__ r' A, .■ 't: , f* t .*v' vo BATHURST _ >; & r>;; * s'i CUMBERLAND \ N> )V .J.-' int!> V?:-‘ / A-i % YYi " . "' '/•’“« NEW SOUTH VMLF.S , >4:» k % r 4rv* jaw** T11 r I GEORG I ANA \ 4 \ *7 THE j i' V 1 K‘: E, T.-k tllawerri M11.E. S \ K I N ;G / / y-'f ,> i S • \ ^^/Mtfuiw t V' .- j ------“ Boundary jf f, : itn Co/nt/'tS. ' 1 „ 1 iSt.-YY*" * X J County SiunJjne-..

h Jr*^<■'%, i iRGYl£t.joe.*r#J snS r “"3- AST —LP AT (r« «$w! ; •»'•■>• r’- F Jf^.^Cr'V;X. VINCEn/ / ^/;jRRAV „ A ^ a \\l 6'j; **-■*•**"* & %\ , Xt >r.j j. C v; r'k ff * T Vv'4 - A „ V Bute man ’s Bay ...... ’ ■-ii ^ O 1 Y,. - 1 " / X:r':r^, vkv v: J v :?» NEW SCUfH WALEt 0 # - “i; erf — twO*. »0 V. sr-:i Ml* r) THE NINETEEN COUNTIES

Source: T. M. Perry, Australia's First Frontier, (Melbourne, 1963) 204

When confronted with the comments made by the Land Board and Oxley,

Earl Bathurst accepted the need for the land grant regulations published

in Sydney in September^ 1826, and endorsed the changes. Furthermore, he

saw a need to amend the instructions he had originally issued to Darling

so as "to place the Purchaser and the Grantee upon the same footing as to 34 the selection of Lands" and also as to the amount of land each could ob- 35 tain. The changes Bathurst outlined in his despatches of April 2, 1827,

in effect reinstated grants-as the only means by which land was to be alien­

ated in the colony. But some months previously, unbeknown to Bathurst,

sales of land had been suspended in the colony because of the slow progress 36 of the survey^due to a shortage of surveyors. In effect, the alterations

in procedures suggested in Bathurst's despatches of April 2, 1827, counte­

nanced what had been done in New South Wales in November^ 1826.

Bathurst issued no further instructions during the remainder of his

term of office. This left Darling in a quandary for the despatches of

April 2 had been equivocal in a number of places;while some instructions

they contained (e.g varying the size of the grant according to the quality of the land) could not be implemented without prior survey and valuation of

the land. On one hand Darling had a series of incongruous instructions and

revisions from Bathurst; on the other^ he had new settlers arriving, wanting

land grants^and old settlers wanting access to land for their increasing flocks

34Ibid., p. 220. 33Ibid., pp. 230-1. 36 Ibid., p. 255. 205

The regulations issued in September^- 1826, provided for the payment of a quit rent of five per cent of the value of the land granted, so to formalize these arrangements some valuation of the land had to be made.

The initial provision had been for each parish to be valued separately but a shortage of surveyors meant this could not be done sufficiently fast to meet the demand for land, so in June/ 1828, the Executive Council sought to establish an average valuation for all land "in the unsurveyed Districts 37 within the present boundaries^". The Council called upon "the most intelligent landowners" to estimate the average value of this land "taking into consideration that the Valuation so fixed is intended to apply to all

Grants of Land made subsequently to January 1, 1826." Their estimates 38 varied from Is. 6d. to 5s. per acre, with an average of 2s. ll^d. This the Council considered too low and so fixed the value at 4s. 2d. per acre; which at five per cent ^ould give an annual quit rent of 20s. lOd. per hundred acres, a "near approximation to the sum of 20s. per hundred acres, which has been levied upon all Lands rented with a view to purchase during the last Two Years." But Darling considered 4s. 2d too high so called upon the Council to reconsider its estimate. On reflection, it felt that setting a value of 4s. 2d "might tend to discourage Emigration," and so

37 The Council Minutes are to be found in HRA Series I, Vol.xiv, pp. 308-11 38 William Cox gave the estimate of 5s. but gave no reason for it. Edward Wollstcrecraft arrived at his figure of 3s. by arguing that land in New South Wales was equal in value to that in Upper Canada where it was 4s. currency - the difference being that of exchange. 206 reduced it to 3s. 4d per acre which represented a quit rent of 16s 8d per hundred acres.

By September/ 1828, the regulations for land grants and purchases had 39 been codified by Darling. Grants were to be given on the basis of 640 acres for each L500 of capital immediately available with the minimum grant being 320 acres. A quit rent of 16s. 8d. per hundred acres was to become payable after seven years, and grantees had to spend within seven years a sum equal to its value on i>*Us» improvemeuforfeit the grant. A quit rent of 16s. 8d. per hundred acres was also payable on purchased land but it was redeemable (as in the case of land grants) "at any time within twenty years from the date of Sale at 20 years' purchase,", Land was to be sold 40 by auction and the amount bid "over and above the annual Quit Rent" had to be paid within two months. While it is difficult to delineate the in- 41 tricacies of the implications of the proposed scheme for sales, Darling claimed it would ensure a revenue for the government and also enable settlers to obtain further land after the capacity of their initial grant , ,42 was exhausted.

See the summary of the rules issued for the information of persons pro­ ceeding to New South Wales in HRA Series I, Vol. xiv, pp. 376-7. 40 Darling had suggested selling land by action instead of by tenders in a despatch dated April 17, 1827. The Secretary of State had approved of this change in his despatch of November 9, 1827, which Darling received on March 15, 1828. 41 See HRA Series I, Vol xiv, p. 311, where it is stated that the minimum price for the land would be its valuation (i.e. 3s. 4d.) so to obtain the land free of quit rent a purchaser would apparently have to pay at least 6s. 8d. per acre. The only advantage a purchaser would have was freedom from the improve­ ment requirements.

Ibid., p. 312 207

While the system as described in the summary looked clear-cut, in practice, during Darling's administration, there were a number of other regulations governing the way land, or the use of land, could be obtained.

A regulation issued in 1826 permitted a settle^ who intended to purchase a certain piece of land, to occupy it until the requisite survey was completed^ 43 for an annual rent of LI per hundred acres. By a Government Order issued in October^ 1828, a settler could lease land adjoining his property for 44 2s. 6d. per hundred acres per year. Though tickets of occupation had been withdrawn it was still possible to occupy land by rental, subject to six months' notice to quit. These various regulations permitted established settlers to expand into new areas without having to pay for the land^as the rents were never collected, while new settlers could obtain land under the regulations governing land grants. The land alienation system was confused, 45 and complaints of corruption on the part of Darling were common, but graziers gained from the confusion and from the slowness of the progress of the survey

If it had been possible to implement Bathurst's original system, they would have faced additional costs at a time when the industry was experiencing severe difficulties and the flow of new settlers could have been checked to the detriment of the industry. Instead, land remained available without

No rent was collected however. See HRA Series I, Vol. xvi, pp. 163-4. 44 HRA Series I, Vol. xv, p. 62. SSSgSEtt acres were leased to thirty- three individuals under this scheme within a few months of its introduction. 45 See J.D. Lang, An Historical and Statistical Account of New South Wales, (London, 1875) Vol. I, pp. 192-4. Lang claims that Darling's partiality in granting land retarded immigration of capitalists. 208

cost, attracting new set tiers'*1 and saving old settlers'* money. Surveyor-

General Mitchell reported in Marchy 183l£ "about 250,000 acres of the best

of the vacant land is held by individuals . . . without benefit to the

revenue^",

It has been argued recently that throughout the eighteen twenties

successive attempts had been made to devise land regulations that would encourage the large-scale activities of wealthy settlers .... In 1831, however, the home government decided that it would be more in accord with current British interests if the Australian colonies were called upon to relieve domestic difficulties by giving employ­ ment to the thousands of redundant English labourers. ^

Whether the regulations in force in the 1820s were designed to facilitate

large-scale exploitation of land depends on what is meant by large-scale and

which regulations are being considered. The 1826 reports of Oxley and the

Land Board, whose recommendations concerning procedures for land grants and

purchases were heeded by Bathurst, stressed the encouragement of settlers of

"moderate capital" and the discouragement of opulent capitalists. At the

same time, the reports' criticisms of the ticket of occupation system were 47 directed primarily against persons "possessing scarcely any property" who occupied land which, it was implied, could be better used by men of means.

While the emphasis in the regulations for land grants and purchases outlined e*|• by Governor Darling in 1828 was benefitting persons with sufficient means to/

fully and immediately eaepdheBxfcsstiaesdhfiEE^, persons without capital^ could and did occupy waste land both inside and beyond the limits of settlement While

46 P. Burroughs, Britain and Australia, 1831-1855, (Oxford, 1967) p. 37 47 See HRA Series I, Vol. xii, p. 387. 209

there was also the ostensible object of preventing the engrossment of land,

large grants of land were given to the wealthiest of the exclusivists (i.e.

persons who had come as free settlers or officials to New South Wales and

who sought to curb the emancipists' drive for influence in the colony).

While therefore the regulations or procedures used by Darling facilitated

"the large-scale activities of wealthy settlers*" this was not the intent of

the regulations devised by Bathurst and the modified versions of these regulat­

ions drawn-up in the colony between 1826 and 1828.

Comparing the new land regulations of 1831 with the actual procedures used in New South Wales during the latter half of the 1820s makes the former

appear markedly different^but if the new regulations set out in the despatches

Goderich sent in 1831 are compared with Bathurst's 1825 regulations and the

locally suggested modifications, there is no difference in the principles, 48 and 1 i t%V°- difference in the practices outlined. The aim of the 1825

regulations had been interpreted even by the Land Board as "the regular

settlement of the Country, consistently with the just rights of the Crown and "49 the general interests and prosperity of the Settler; a principle subsequent­

ly reaffirmed by Bathurst and embodied in the 1831 regulations. The sale of

land by auction as a means of raising revenue for the colonial government was not a new departure in 1831 for Bathurst's original regulations had

provided for the sale of land, while Darling had advocated auctions^ and

48 " ° " ' See J. Phillip,'Wakefieldian Influence and New South Wales, 1830- 1832," Historical Studies of Australia and New Zealand, May, 1960, pp. 173-8. 49 C^et-e* referred +® *** HRA Series I, Vol xii, p. 414. 210 suggested land sales and rent as sources of revenue. Perhaps the only major departure from the system^which officially should have been in operation in the 1820s^was the minimum price at which land was to be sold

- five shillings per acre. In the late 1820s land had been locally valued for land alienation procedures at 3s. 4d. per acre, though in the early

1820s it had been valued at 10s., and in the mid-1820s had been sold for

5s. or 7s. 6d.jSO that 5s. per acre could almost be taken as a compromise valuation.

Neither were the new regualtions framed without reference to local conditions. When justifying them Goderich referred to the 1830 report of the Agricultural Society^where its president had called upon the government "to direct a proportion of the industry of the Colonists to the culture of crops better suited to the Colony, and more profitable in their returns, than those to which our labour has hitherto been con- ^ ke fre*'dc*A- fined/" . Elsewhere in the report ke/had described the colony as "flowing with milk, and burdened with beef and mutton^'^ and expressed a fear that

"if preventive measures were not adopted" the rapid expansion of cattle numbers would soon lead to wild cattle taking over the available pasturage in the colony. The president had further suggested that a system of flock management involving "judicious selection" of sheep would have to be considered to replace that which simply allowed their numbers to multiply.

~^HRA Series I, Vol. xvi, p. 116.

~^The Report of the Agricultural Society, (Sydney, 1830) p. 70. 211

This report could be construed as a testament to the failure of the existing land system, and the new regulations despatched in 1831^as an attempt to deal with the problems mentioned in it.

While the land alienation procedures embodied in the Ripon regulations^ which became operative in New South Wales in 1831;might be regarded as the implementation of principles already incorporated in land policies but ignored in practice to the detriment of the colony, their provision for the financing of immigration by land sales was something new. This was however a later addition) for# initially, Goderich had suggested "raising a Revenue from the assignment of Convict Servants to the Settlers . . . /to7 facilitate any arrangement that may be concerted at home for directing the course of 52 Emigration towards the Australian Colonies;", But this,and also his suggestion that immigration might be encouraged by offering inducements to colonists financing immigrants, were not well received in the colony.

Governor Darling had personally favoured the idea of levying a tax on convict labour in spite of local feeling^but Governor Bourke saw no virtue in it and interpreted the new imperial regulations as providing that immigration was to be financed from land revenues, which were to be used exclusively for this 53 purpose.

When Bathurst's scheme for land sales was discussed in 1826 the local

Land Board recognized that it could not succeed while persons were able to

~^HRA Series I, Vol. xvi, p. 380. 53 HRA Series I, Vol. xvii, p. 162. For a discussion of the implement­ ation of the scheme to finance immigration from land revenues, see Burroughs, op. cit., pp. 59-75. 212

obtain the use of land by simply occupying it. If land sales were to provide

a revenue for local government purposes^as in the first version of the 1831

>45 regulationSjOr for immigration^ subsequently provided, there had to be some

check on land occupation. Preventing the spread of settlement beyond the 54 limits of location as promulgated in 1829^. would not only ensure the sale

of land but would also lessen the costs of administration; prevent the average costs of sheep-farming from increasing^and according to the ideas

Wakefield had published in 1829 in his Letter from Sydney, ensure the 5 6 existence of a civilized community. These were all to the colony's ad­ vantage > or so it would appear to the English framers of the new regulations.

There was much talk in New South Wales of labour shortages in the late

1820s so immigration was necessary,and this required finance. There were many colonists besides the President of the Agricultural Society who expressed doubts in 1829-30 about the colony's dependence on pastoral activity and who appealed for governmental assistance for diversifying its economy. There were others who called for a less land-extensive system of sheep-raising in these years. Such things must have been known to those who drew up the new regulations, so to suggest that the Ripon regulations

—— Only land within these limits - the boundaries of the 'nineteen counties' - was to be offered for sale. A twentieth county had been added in July, 1830, but references continued to be made to the 'nineteen counties'.

^"*In the years 1829-30, there were frequent complaints in the colony of how the spread of settlement was leading to increased costs and how this was retarding the expansion of sheep-raising.

^^See S. H. Roberts, The Squatting Age in Australia, 1835-1847, (Melbourne, 1964), p. 70. 213 represented a change in focus from colonial needs to British needs fails to consider the nature of the information on New South Wales at the end of the 1820s available in the Colonial Office in London.

These conditions had changed by the time the regulations became known in the colony: pessimism had given way to a guarded optimism concerning the future prospects for wool. The measures outlined in the regulations all represented additional costs: land was henceforth to be sold and not granted; quit rents were to be collected; the free access to land was to be stopped; and, most irksome of all, settlement was to be concentrated

As a later commentator described the situation:

In the course of 1831 affairs began to improve, the drought having broken up, and the seasons having again become genial and fruitful. But in the middle of this year there occurred an event of the great­ est moment, which, it was generally thought, would put a stop to all our future advancement. This was the discontinuance of the free grant system. Crown land was no more to be given away, but to be sold by auction at the upset price of five shillings per acre. It was argued, that if the late universal bankruptcy had happened even with the advantage of free grants, what but continued poverty could be expected when land was not to be had but at this high minimum price?57 58 This fear was not universal, and the introduction of the sale of land did not inhibit the growth of sheep-farming, which with the initiation of recovery became recognized once more as the sole basis of the colony's economy.

The number of unassisted immigrants arriving in the colony, which had fallen

57 Anon, 'The Affairs of New South Wales', The New South Wales Magazine, 1843, p. 245. 58 Ibid., p. 402 214 from 1,205 in 1829 to 772 in 1830 and 457 in 1831, rose in 1832 to 1,214 and then in 1833 to 1,432. Since a proportion of these immigrants became sheep-farmers, the increased flow in 1832-3 provided a fillip for the live­ stock market. This, and improved wool prices after 1831, renewed the op­ timism of established settlers, which was reflected in the purchases of land 59 they made under the new regulations. Even so, the purchases made in 1832-3 were not sufficient to accommodate the growing number of sheep in New South

Wales, many of which were depastured illegally on lands both beyond and within the limits of settlement.

The illegal occupation of land beyond the limits was the antithesis of the intent of the Ripon regulations whose emphasis was on the regularization and concentration of settlement. Such expansion potentially restricted 60 the sales of land and added to the costs of administering the colony but

Governor Bourke was loath to contain it, wishing to avoid "as much as possible interposing any obstacle to the profitable employment of rearing sheep for which great extent of country is required,"^

By the middle of 1834, he had to report that "the desire of procuring good pastures for Sheep has led the Colonists far beyond the limits of locat- 62 ion/". Outside the southern boundary there were numerous settlers on the

— — Ibid. , p. 403. Many of these purchases seem to have been purchases of land formerly leased under Darling's regulations. Such leases were allowed to continue, however, and in 1835 the rent payable was reduced. (HRA Series I, Vol xviii, p. 55) 60 HRA Series I, Vol. xvii^, p. 469.

f) 1 Ibid. , See also e.g. Vol. xvii, p. 271.

62Ibid., p. 470. 215

'Monarro Plains' /Manaroo/ and as far south as Cape Howe; to the s<»ut

only concern was that this unauthorized occupation of land should "not be

permitted to continue so long as to create any title to the Land in the ‘'64 occupier, but this possibility had been removed, he thought, by an Act

passed by the New South Wales Legislative Council in August^ 1833, (4

Wm. IV, No. 10). This act was designed to prevent "the rights of the

Crown from being affected or lost sight of by mere occupation without pur- 6 5 chase for a long space of time,"^ and provided for the appointment of

Commissioners to protect Crown Lands from "encroachment, intrusion or

trespass/", Fortunately, the act was administered as a measure of control 6 6 rather than prevention, for as Bourke reported in 1834 "much of the fine

wool, which is exported to England, is taken from Sheep depastured on

£ ■ vacant Crown Land beyond the limits assigned for the location of settlers,".

6 3 Ibid . , pp. 468-70. Cp. Roberts' map, op. cit. ,p. 139. Bourke's descrip­ tion suggests that the extent of the occupation of the Manaroo was greater than that shown by Roberts. 64 Ibid., p. 470. f) s HRA Series I, Vol xvii, p. 271. 66 Burroughs, op. cit., p. 147, argues that the Act was "framed with refer­ ence to lands within the limits of location" and repudiates Fitzpatrick's con­ tention that it was "the first to recognize squatting outside the 1829-30 limits" (British Empire, p. 37). But in discussing the Act, Bourke referred to "those tracts of Country in the remote interior" (HRA Series I, Vol xvii, p 271) which would undoubtedly mean settlement beyond the limits of location. No matter how the Act was worded Bourke's discussion of it suggests he intended it to apply equally to settlement outside the limits (Burroughs was repeating an observation first made by K. Buckley, "Gipps and the Graziers of New South Wales, 1841-46," Historical Studies, May 1955, p. 405).

f) 7 HRA Series I, Vol. xvii, p. 469. 216

The availability of land by simple occupation ensured the continuance

and expansion of sheep-farming during the early years of the 1830s. Flocks

owned by "settlers cultivating Land within the Limits, . . . Lawyers,

Merchants and Shopkeepers, living in Sydney and other Towns, . . . attended by Overseers, either free or holding Tickets of Leave" were pastured beyond the limits, as were flocks "superintended by their owners, being

persons who have no property whatever in Land, amongst whom are to be found 68 some retired officers/-". There were others, squatters as they were then known in the colony: persons "who obtained a livelihood by occupying

the Crown pastures without paying for them, and collecting stolen cattle,

sheep or horses, and, in fact, committing depredations generally on the

establishments of the settlers.,",and persons "who keep what are termed 'sly

grog-shops', tempting the convict servants on those establishments to commit

robberies, receiving stolen property, supplying them with spirits, and with means of gratifying their passions in other ways, in return for that stolen 69 property,-" . Uncontrolled access to Crown lands had provided free pastures

for livestock-owners, but had also permitted the growth of abuses.

^Ibid . , pp. 468-9. 69 James Macarthur in evidence given on May 23, 1837, to the Select Committee on Transportation. (See Minutes of Evidence, p. 191.) These squatters occupied land illegally both within and outside the limits of location. After 1836 the term squatter was applied to any person occupying land beyond the limits. See Roberts, ojd. cit., pp. 54-65, and Burroughs, op. cit., pp. 148n. 217

Many instances of squatters' lawlessness were cited in evidence given to

the 1835 Select Committee on Police and Gaols, which reported:

the interior of the Colony is infested by gangs of cattle-stealers and othe disorderly persons whose depredations are carried on to an alarming extent. These groups consist of freed men who have served short sentences, or those of long sentence holding Tickets-of-leave, who combine with the assigned /convict/servants to plunder the herds of their masters The nefarious practices of these men are greatly facilitated by the system of taking unauthorized possession of Crown Land, or Squatting, which now prevails.7®

Judge Burton in an address at the opening of the Sessions in 1835 had

claimed that "the occupation of Waste Lands by unauthorized and improper

Persons" was one of the main factors accounting for the prevalence of crime

in New South Wales^ and pointed to the need for some control: measures which would ensure that 'improper' persons were denied this boon. Bourke recognized that the much-maligned squatters were "only following in the steps of all the most influential and unexceptionable Colonists . . . /whose land

n 11 **=■ was/ held by no better Title. This being the case, it is evident that no partial regulation can with propriety be introduced^''^ he informed the

, 72 Secretary of State in December^ 1835, when commenting on Burton s speech.

Just two months previously he had written that the governmentjbeing unable to prevent the expansion of settlement, faced the problem of turning "to the

The use of the word squatting in this context suggests that it may have been then used to designate any unlawful occupation of land, while the term squatters was applied only to ex-convicts so occupying land.

^HRA Series I, Vol. xviii, p. 230. 72 Ibid . 218 best advantage a state of things, which it cannot wholly interdicts",

Expansion had to be controlled in such a way as to wrest from occupiers of Crown land recognition to "the Title of the Crown" for the lands 74 they occupied. This had been Bourke1s intention in the framing of the

Act passed by the New South Wales Legislative Council in 1833 and renewed in 1835, but Bourke wanted a stronger measure. The anti-squatter agitation of 1835 culminated in the presentation of a memorial from "certain propretors of stock respecting the evils which at present result from the occupation of vacant Crown lands by persons usually known under the denomination of 75 squatters" and this provided Bourke with the opportunity.

When the memorial was brought before the Executive Council on March 30,

1836, the members agreed that some form of permissive occupancy was necessary^ and noting that any 'Unnecessary limitation of pasturage should be avoided'^ referred it to the Legislative Council. Its consideration there led to the passing in Jul^ 1836, of an act to restrain the unauthorized occupation of Crown Lands (7 Wm. IV, No. 4). This provided that persons could occupy

Crown land within the limits by leasing it "as heretofore", while from the beginning of 1837, licences would be granted for occupying Crown land outside the limits. According to Bourke, the revenue derived from the licences and leases would just cover the cost of the commissioners appointed

74Ibid., p. 231.

7^See Executive Council Minutes for 1836, NSWA wC5 of Sooti, 219

to administer the act but the "taking out periodical Licences and the multiplication of Leases" would ensure the recognition of the rights of the 7 6 Crown. Bourke had used the anti-squatter manoeuvres of the wealthy

graziers to advantage, implementing a measure designed to protect the

Crown's rights and at the same time the rights of persons, both rich and

poor, occupying Crown land^ But the act, which was to have a currency

of two years, sanctioned the occupation of land outside the limits: by

doing so, it conflicted with the intent of the Ripon regulations

Bourke had repeatedly referred in his despatches to both the im­

possibility and the undesirability of stopping or even curtailing

expansion, and had recommended that the government's policy should

recognize this. In Julyy 1834, he suggested extending the southern limit 78 of location to Twofold Bay, to which suggestion the Earl of Aberdeen,

then the Secretary of State for Colonies, replied:

His Majesty's Government are not prepared to authorize a measure, the consequence of which would be to spread over a still further extent of Territory a Population which it was the object of the late Land Regulations to concentrate, and to divert for a distant object, not immediately necessary to the prosperity of the Colony, a portion of its Revenues, the whole of which is barely sufficient to maintain in that state of efficiency, which it is so desirable, the various Establishments and Institutions, required by the In­ habitants of the Districts, already occupied.

7 f) HRA Series I, Vol. xviii, p. 539. The fee for the licence was to be L10 per year and this entitled the holder to occupy any number of areas for depastur­ ing livestock. Occupation for the purpo ;es of the act was to be manifested by some kind of building or cultivation, not by simply the pasturing of livestock. ^Bourke thought that the petition against squatters had misrepresented the situation by exaggerating the number of ticket of leave holders occupying Crown land. He regarded their suggestions for regulation with some suspicion and therefore guarded against providing them with the means of oppressing smaller graziers. See Roberts, op. cit., pp. 77-81. 78 HRA Series I, Vol xvii, p. 469. 79 Ibid., p. 616 220

Even if the British government failed to appreciate the implications of

the colonial techniques of sheep-farming, Bourke did not: "sheep have at

once disposed of the question of concentration," he wrote in February, 8 0 1835. No matter what orders the British government might issue, the free

pastures available for the taking negated any serious consideration of con­

centration in the colony. Bourke had to face the fact that graziers were

constantly moving outwards from the nineteen counties occupying new areas

of pasture for their flocks, tfhen in Augusty 1835, he learned that colonists

from Van Diemen's Land had crossed Bass Strait and formed settlements on the

southern coast of New South Wales; and that John Batman, as agent for the

Port Phillip Association - a company formed in Van Diemen's Land, had concluded

a treaty with aborigines, which the association claimed gave it the right 81 to about 600,000 acres of land in the vicinity of Port Phillips. The

receipt of Batman's treaty and the association's claim for the land signified

the intensity of interest in settling this part of New South Wales^and at the

same time raised a legal problem concerning the validity of the treaty.

Bourke quickly issued a proclamation affirming the right of the Crown to the

land in question and stating that a treaty made with aborigines was null and

Bourke to Horton, February 20, 1835, quoted by Burroughs, op. cit., p. 160. 81 Fitzpatrick, op. cit. , p. 48. The Port Phillip Association was one of many joint-stock companies formed in Van Diemen's Land in 1835 to acquire land on the southern coast of the mainland. (See Lang, op. cit. Vol. I, p.281.) Batman was not the first to establish a settlement on the southern coast; the Henty family had settled at Portland Bay (about 200 miles to the west of Port Phillip) in 1834. See Roberts, op. cit., pp. 158-165 and Burroughs, op. cit. , pp. 159-168. 221

void, but this did not remove the new settlers^nor did Bourke wish to do so.

In October, 1835, he sent a report of the proceedings to the Secretary of

State, Lord Glenelg, in which he depreciated Batman's actions but suggested

that it would be best to establish a township at Port Phillip; to sell allotments in the town and land in its vicinity under the terms of the

existing regulations and use the proceeds to defray the cost of the survey 8 2 of the establishment of schools and of administering the settlement.

The immediate reaction of the Colonial Office to news of Batman's 8 3 new settlement was unfavourable, but shortly after it had been received,

evidence of British interest in the new settlement came to hand in the form 84 of a letter from the agent of the Geelong and Dutigalla Association. The new settlement had captured the imagination of Scottish capitalists: "the

Settlement at Port Phillip will probably be reinforced by a large number of

Emigrants, and a considerable introduction of Capital from Scotland" Glenelg 8 5 reported in April, 1836. Whether Bourke's representation alone could have

saved the new settlement is problematical, but when combined with evidence of British interest, there was little the Colonial Office could do but approve of Bourke's suggestion. "The sanguine ardour of private speculation" had

quickened and anticipated "the more cautious movements of the Governments"

- to use Glenelg's own phrases. It was an age, he reported, when restraints were being broken down by motives which were "too strong to be encountered by

g 2 HRA Series I, Vol xviii, p. 157. Bourke also suggested that a similar scheme for Twofold Bay Q O OJBurroughs, op. cit. , pp. 165-6. See in particular the passage quoted from Hay's memorandum. 84 See HRA Series I, Vol xviii, p. 381.

^Ibid . , see also p 685 222

ordinary means All that remains for the Government in such circum­

stances is to assume the guidance and direction of enterprises, which, tho' 8 6 it cannot prevent or retard, it may yet conduct to happy results." This

is what Bourke had suggested for some time: this was what Glenelg decided 8 7 should be done in the case of the Port Phillip settlement.

Having countenanced the establishment of a settlement outside the limits,

Glenelg had to accept the squatting act passed by the Legislative Council in

1836. Squatting could not be stopped^therefore it should be controlled and

this was what the act sought to do^even if it was incompatiable with the aim

of concentrating settlement. The needs of pastoralism had triumphed: land

was now legally readily available; capital was being attracted to New South 88 Wales by the provisions of Forbes Act of 1834; the only shortage complained

of in 1835 was of labour.

The Committee on Immigration appointed by the Legislative Council in

1835 was the first of twelve appointed before 1851 which^having heard the

evidence of settlers concerning labour shortages and consequent wage increases,

reported that the colony was doomed unless there was an immediate vast addition 89 to the supply of shepherds. "Few additional reasons can be urged in support

Ibid., p. 380 8 7 After receiving Glenelg’s despatch of April 13, 1836, Bourke issued a proclamation authorizing the Port Phillip settlement. A governmental adminis­ tration was established in September, 1836, and the first sale of Port Phillip land was held in June, 1837. Licences for pastoral occupation (under 7 Wm. IV No. 4) were first issued in July, 1838. ®®See p#. am fi4 . O Q The Legislative Council appointed a committee on immigration in each year between 1835 and 1851 except 1836, 1844, 1846, 1848 and 1850 223 of the necessity of Immigration, that have not already been adduced, in the Reports of the several Committees of 1835, 1837, 1838, 1839, 1841 and

1843x"^Charles Nicholson wrote in the report of the 1845 Select Committee on

Immigration, which simply repeated the reasons given in the previous reports* while ^hese same reasons were later repeated in the three other reports on immigration made before the gold discoveries of 1851 began to attract im­ migrants. The reasons cited in all of the committees' reports to justify immigration are exemplified in that of the 1845 committee where it was stated that "the annual increase in the flocks of the Colony requires a proportionate 90 periodical addition to the number of shepherds." Without this addition, the prosperity of the colony would suffer for its prosperity depended on the success of its wool exports and on wool prices in England and labour costs in 91 New South Wales.

In essence the various immigration committee reports, and particularly those issued after 1843 when squatting interests dominated the Legislative

Council (which had become partly-elected in 1842) reflected the settlers' desire to get "shepherds as quickly and as cheaply as possible, and nothing else;" to get "able-bodied single /men/ from an agricultural county - 92 humble, ignorant and strong." This was what was wanted but as things turned out the colony never obtained enough shepherds^though in the early

90 Report from the Select Committee on Immigration,", p. 2, Votes and Proceedings . . . : 1845 91 Ibid., p.l. See also below p. 185. 92 Samuel Sidney, The Three Colonies of Australia, (London,1853) p. 128-9. 224

1840s it obtained a sufficient supply of immigrants.

While the 1835 Committee on Immigration report was the first to set

out 'the need for shepherds' argument to justify a call for immigration,

there had been some complaints voiced in the late 1820s about the diffi­

culty of obtaining shepherds, but such complaints were limited and did not

lead to any demand for a programme of immigration into New South Wales in

the early thirties. Assigned convicts were then the main source of labour

for the pastoral industry so colonists saw the solution of any shortage of

shepherds in the diversion of convicts from government employ to settlers':

they successfully pressed Governor Bourke into curtailing public works to

release convicts for assignment to settlers.

After the despatches Goderich wrote in early 1831 were received, Bourke

sent a circular to the principal colonists to ascertain the labour situation 93 in the colony. Its findings were reported to the Legislative Council on

February 10, 1832, which apointed a committee to investigate immigration on

February 20, and its report was presented on March 16, 1832. As a result

the Legislative Council decided to allocate L10,000 from the land revenue; one third "for bringing out Labourers and Mechanics under the direction of

the Commissioners of Emigration", and two thirds for bringing out single 94 female immigrants also under the direction of the Emigration Commission.

The circular was sent on July 18, 1831 Votes and Proceedings . . 1832. The Commissioners had been ap­ pointed in London in June, 1831. (See Burroughs, op. cit., p. 69, p. 72.) 225

But Bourke had acted wrongly in permitting the Legislative Council^decide on the use of land revenue as he learned from a despatch sent by Goderich in March, 1832, so that in subsequent years the appropriation of land re­ venue was the prerogative of the governor who had therefore to meet both the demands of colonists for immigrants and those of the British government.

The 1835 committee found many faults with the programme of assisted immigration which had operated from 1832. Money advanced to immigrants 95 for the cost of their passages had not been repaid and it did not appear possible to collect such debts. Furthermore, many of the immigrants who had arrived were unsuitable - many of the single females were of low or dubious moral character; the immigration programme had added comparatively few useful workers to the colony's labour force. Slightly over three thousand assisted immigrants arrived during the years 1832-5--four hundred 96 adult males, about 760 children and nearly two thousand single females.

While the programme was not conspicuously successful in absolute terms, it was regarded as a lamentable failure in terms of the potential created by the system created in 1831. Only a fraction of the land revenue devotable to financing immigration was spent, the balance remaining at the end of each 97 year being transferred to the general revenue of the colony which exceeded

A bounty of L8 was paid for single female immigrants and loans were made to "mechanics and labourers" and supplementary loans to females to meet the cost of the voyage to Sydney. 96 See HRA Series I, vol xxii, p. 417. The figures for immigrants arriv­ ing each year given in this return differ slightly from those given in Votes and Proceedings but not to any significant degree.

^HRA Series I, vol. xviii, p.ZJl- 226

TABLE £

Land Revenue and Expenditure on Immigration

in New South Wales 1832-5

Proceeds of Expenditure Sale of Land on Immigration Balance

1832 L12,510 L 5,293 L 7,217 1833 24,956 10,759 14,197 1834 41,844 7,902 33,942 1835 80,785 11,438 69,347

Source: HEA Series I, Vol. xxii, p. 417. expenditure by a more comfortable margin each year. This being the

situation^the British authorities decided in 1834 to transfer the cost of maintaining the colony's police and gaols to the colonial revenue, a move 98 which provoked a considerable reaction in the colony.

Governor Gipps later claimed that the tone of the 1835 committee's report, which called for all the proceeds of land sales to be devoted to

immigration, was the product of a desire to have the British government 99 pay for the police and gaols. Certainly this would explain the sudden

quickening of colonial interest in formulating a system of assisted im­ migration in 1835 much better than by suggesting that there was a sudden

realization concerning, or a sudden appearance of a labour shortage in

1835. The previous apathetic attitude towards immigration has been

98 Lang, o£. cit., p. 263. See also HRA Series I, Vol. xviii, pp. 393, 397; Vol,xix, p. 80. 99 HRA Series I, Vol xix, pp. 641-2. 227

blamed on Governor Bourke1s lack of "intellectual discernment" and of

"vigour of character",^^but Bourke had suggested for some time that all

the land revenue should be devoted to immigration and had called for "active measures."^^ But the "active measures" depended on the British authorities 102 who were charged with the responsiblity of selecting and shipping immigrants,

and they had found it difficult to find suitable immigrants, while Bourke's

references to the uncertainty of the land revenue would have occasioned some 103 caution on their part. Many circumstances therefore combined to curtail

the flow of assisted immigrants to New South Wales in the period 1832-5 but

the British decision to make the colonists pay for their police and gaols

awakened them to the need to spend the land revenue.

The 1835 committee suggested that three thousand immigrants were immed­

iately needed, and as a result of its recommending that immigration would

be best left to private enterprise, Bourke published a notice on October 28,

1835, outlining a scale of bounties payable to colonists to defer the cost

of introducing labour into New South Wales. The system met with little

success in 1836 when 743 immigrants arrived at a cost of til,895, but in

the same year the proceeds of land sales amounted to tl26,459. The balance

100 Lang, ££. cit., p. 262. Roberts repeats this explanation. 101 HRA Series I, Vol xvii, p. 538. 102 The Emigration Commission appointed in 1831 was disbanded in August, 1832. This change in administrative procedures would have hampered the pro­ cedures involved in forwarding immigrants. 103 HRA Series I, Vol. xvii, pp. 171-3; m pp. 298-9 228 in the hands of the government therefore grew so that by the end of 1836 the government held E340,000 in specie}^ This created an embarrassing situation for the local banks which sent a letter to Bourke on October 1, 106 1836, drawing his attention to their plight. He met their deputation on

October 10 but could give them little satisfaction, so the banks later again combined to send a letter in which they listed as

"probable means from which relief might be expected . . .; and extended system of emigration; the acceptance /by the government/ of tenders, even at a high rate; the suspension of land sales, or what some now think profitable, the payment of two thirds of the purchase money in England for the purpose of emigration; the payment of all claims on Government in specie . . .; a loan to the Banks without interest."

Having listed these possiblities, the letter concluded: "there cannot be any mode of expenditure so advantageous to the colony, as the promotion of emigration."

Bourke discussed the bank's representations in a despatch dated January 1,

1837, where he pointed out that he could do nothing to reduce revenue--neither land nor general--and that the only way the situation could be remedied was by increasing expenditure. Since "the public voice calls for the encourage­ ment of Immigration," he advocated this as the solution. He had already implemented a bounty scheme, while in April, 1836, he had suggested to the

104 The balance of the land fund at the end of 1835 was transferred to the colony's general revenue. The same procedure was adopted at the end of 1836 (HRA Series I, Vol. xix, p. 81, p. 640).

l^HRA Series I, Vol xviii, pp. 633-5. 106 The letters sent by the banks and Bourke's replies are to be found in the Colonial Secretary's correspondence. NSWA ( JeuM uJaJci) 229

Colonial Office the institution of a government system of immigration, i.e , a system whereby British government agencies would select and send out suitable migrants. However, while he had heard rumours that the suggested government scheme had been approved in London he had not been officially informed of the government's intentions, nevertheless he was taking steps to put the scheme into operation. If successful it would overcome the monetary problem which had arisen by the means the banks themselves had suggested}^

In a despatch sent by Lord Glenelg in March, 1837, Bourke was informed of

"the wmr arrangement*pMfMi . . . [for/ more efficient and systematic 108 scheme of Emigration . " , All the land revenue was henceforth to be used for immigration; one-third to finance bounty migration and two-thirds to finance the government system, which had now received Whitehall's blessing. As a result of the institution of the government system the number of assisted 109 migrants arriving in New South Wales in 1837 rose to 2,360 of which 742 came under the bounty scheme}^but this total was still short of the three thousand the 1835 committee had called for as immediately required. By the time the Legislative Council's committee examining immigration began to hear evidence in early 1837 there was a pronounced shortage of labour in the colony and proposals for importing Indian coolies were examined by the committee.

^^HRA Series I, Vol. xviii, pp. 633-5. Lang wrongly claims that the government scheme was due to the initiative of the British authorities (op. cit., p. 266). 108 HRA Series I, Vol. uiu) p> 8^. xvm; 109 HRA Series I, Vol xxii, p. 417. Figures given in Votes and Proceedings for various years show the number of assisted migrants arriving in 1836 as 808, and in 1837 as 2,664, whereas the return quoted which was compiled at the Sydney audit office in September, 1842, shows 743 assisted migrants in 1836 and 2,360 in 1837.

^ HRA Series I, Vol. xxi, p. 545. 230

The results of the government system had not yet become obvious, so the committee recommended that bounties should be increased to encourage 111 British immigration and that Indian coolies should be brought to the colony.

Bourke accepted and acted upon the first suggestion but expressed reservations concerning the second which were confirmed by the Colonial Office who refused to consider this as a solution.

A new element of urgency appeared with the publication of Bourke's notice in the Sydney Gazette of November 18, 1837, informing colonists that it was the British government's intention to shortly discontinue the assignment of convicts to settlers. Bourke suggested in this despatch of November 22,

1837, that the abolution of assignment should be gradual and it was not until 112 January 1, 1839, that assignment was abolished, but in the meantime colonists had to recognize the urgent need to increase the flow of immigrant labourers.

The number of assisted migrants arriving increased to 6,115 in 1838--1,622 being bounty immigrants--but this was fewer than the ten thousand the 1837 committee had estimated were necessary.

t *n The 1838 committee on^«migration repeated the theme of the need for labour for the pastoral industry, but were very critical of the government system by which over three-quarters of the migrants who arrived in 1837-8y were brought.further objections were raised to the government system in the colony 113 during 1838-9. It was claimed that it was being used in England to relieve

^^HRA Series I, Vol. xix, p. 83 112 Ibid. , pp. 188, 800. HRA Series I, Vol. xx, £>p. 400* 113 HRA Series I, Vol. xxii, p. 47. 231 the parishes of the cost of maintaining paupers; that undue preference was given to Roman Catholics in the election of migrants in Ireland; that the immigrants brought under this scheme were inferior--in particular 114 many large families were brought; and that the costs of bringing immigrants were higher than those of the bounty system. Gipps admitted the truth of this last complaint, of which much was made in the 1838 committee's report but pointed out that neither Bourke nor he had ever thought that the government system would be as economical as the bounty system. Bourke had considered that "the Immigration conducted by private enterprise would be insufficient for the wants of the Colony"^^and had recommended a government system to supplement the bounty system. Gipps thought likewise and, in spite of the findings of the 1838 committee, in October 1838 re­ commended the continuance of the government system, "at any rate 'till the end of the year 1839. "^°

Gipps' reticence was not a reaction to the local cirticism of the government system but to the state of the colony's finances. The proceeds of land sales was declining: in 1836 1,126,459 had been realized from the sale of lands in 1837, 1,120,188, and by the middle of 1838, it was obvious that +he total proceeds for 1838 would be lower still (it proved to be

1,116,325). Gipps attributed this fall in land sales primarily to the 117 decline in wool prices in 1837, which was regarded in the colony as a

114 The 1837 committee had suggested giving bounties "to unmarried men unaccompanied by a corresponding number of single females" but Bourke did not agree with this recommendation, observing: "if the pressing wants of the Settlers afford so strong a motive as is represented for the introduction of single labourers, it may be left to individuals to bring them to the Colony at their own expense." (HRA Series I, Vol. xix, p. 83) ^^HRA Series I, Vol. xix, p. 640. 232

temporary phenomenon, but when writing despatches in August and October,

1838, he expressed no optimism concerning the future behaviour of land

sales. Furthermore it was not only land revenue which was falling: the colony's general revalue had fallen from L354,802 in 1837 to L335,294 in

1838, while expenditure grew from L305,388 in 1837 to L499,396 in 1838.

The appropriation of all the land revenue for immigration after 1836 had

lessened the general revenue, while the cost of the gaols and police 118 imposed on colonial revenue from 1835 and an increase in public works in 1837 had increased expenditure. Though Bourke had pointed to the impending financial difficulties of New South Wales and appealed for a grant from the British Treasury to assist in paying for the police and 119 gaols^ in September^ 1837, nothing was done by the British authorities so the situation Bourke foresaw confronted Gipps in the latter half of

1838. In these circumstances all he could recommend was to maintain the government system till the end of 1839; maintain total immigration at its present rate for "a year or two"; and "if our funds prove insufficient to meet it, we should rather have resource to a loan than stop it,"--a measure 120 advocated by the 1838 immigration committee.

Braim, ££. cit., Vol. 1, p. 137n states that "in explanation of . . . the slight diminution" in land sales in 1837-8, "it may be mentioned that the best lands had been disposed of, and those which remained were chiefly valu­ able on account of their connection with other estates." 118 1,45,200 was voted for 1838 by the Legislative Council. 119 HRA Series, Vol. xix, p. 81 120 Ibid., p. 642. The committee had suggested raising a loan of L2,000,000 over a period of years. Gipps was opposed to this scheme suggesting that "we should measure the sum to be borrowed by the demand for Immigration, rather than fix the amount of the Loan . . . and regulate our importation of Immigrants in such a manner as to spend the amount of it in a given number of years." 233

The despatches Gipps sent towards the end of 1838,and "Deputations of

Persons connected with the Colony" who waited on Normanby, the Secretary of

State in early 1840 to deprecate "a stoppage in the supply of labour, at a moment when an annual course of Emigration has just been set into steady operation", forced fe-iurr to consider the question of the adequacy of the colony's land revenues for meeting the cost of immigration. He referred the problem 121 to Elliot, the Agent General for Emigration in London, who reported in April,

1839, that thought the decline in land revenues appeared to be temporary, if it was not, and if expenditure continued at the same rate ,the accumulated balances for immigration would be absorbed by the expenditure in the government system alone by the end of 1839. In the circumstances Elliot suggested that government emigration should continue at the same rate as in 1838 till the end of 1839. If the revenue proved inadequate, Elliot felt that a loan should be raised,but consideration of this possibility should wait till the report of the committee of the Legislative Council then examining immigration was available. This way there would be no break in the flow of migrants and a decision could be made on the basis of later information. Since the

Treasury agreed with this proposal, Normanby informed Gipps in May^ 1839, that government immigration would continue "for the present year to the same 122 extent as the preceding year."

0 This was not to be the case2*t-6,463 migrants were sent from Britain under

121 The U.K. Select Committee on Colonial Waste Lands held in 1836 had re­ commended the appointment of a board to superintend land sales in the emigration to the colonies. Instead Elliot was appointed Agent -General in 1837. 122 HRA Series I, Vol. xx, pp. 176-9. 234 the government scheme during 1838, but only 4,096 during 1839. Nearly 4,500 government immigrants arrived in New South Wales in 1838 and about 5,500 in

1839, while the number of bounty immigrants increased from 1,622 to 2,814, so that the total number of assisted immigrant arrivals rose from 6,115 in 1838 to 8,339 in 1839. This looked to be the beginning of the flow of immigrants needed by the colony, but in October^ 1839, Lord John Russell, the new

Secretary of State^ decided^on the basis of a report given by Elliot^to stop government emigration once those ships then being prepared for the voyage out 123 had left. A despatch sent by Gipps on February 27, 1839, had repeated the colonial objections to the government scheme and the forebodings about land revenue: this, and a marked decline in the desire to emigrate to New South

Wales, formed the basis for Elliot's suggestion. Reports appearing in news­ papers in Britain about the long and severe drought in the colony and the consequent high cost of food, and "the active advertizing System of various new associations in favour of emigration and other Settlements such as South

Australia, New Zealand, Texas and other places" had lessened the attractions 124 of New South Wales.

Russell reported his decision about government immigration in a despatch dated October 11: the Legislative Council received the report of the 1839 immigration committee on November 12. It recommended abandoning the government system; increasing the bounty payment by thirty shillings; and^if land revenues

123 Ibid., pp. 364-5. 124 Ibid., p. 382. were not sufficient to support immigration "on an extensive scale", raising 125 a loan on the London money market. As it turned out the proceeds of land sales in 1839 were L152,963 and in 1840, L316,626: the astounding results of government land auctions in Melbourne on June 10, 11, 1840 led Gipps to report 126 that there would be no need to raise a loan.

The increase in the bounty payment, which made it "as nearly as possible equal to the actual Passage Money,"^led to a vast increase in the number of applications for permission to import migrants. When originally established the bounty system was designed for the use of settlers wishing to bring in employees, but shortly after its inception permits were issued to persons in the colony who "did not pretend that they wanted them /immigrants? for their own employment; and thus the Importation of Emigrants gradually grew into 128 a Trade|" - Till the beginning of 1840, there were two or three firms in

London engaged in this trade, but the increase in bounties attracted many more

Whereas during 1838 permits to bring in 12,884 immigrants were issued, and during 1839/ permits for 14,057, during the first four months of 1840 permits for 18,740;and during the remainder of 1840^ permits for a further 38,518, 129 were issued by Gipps. He had foreseen the attraction increased bounties

125 Ibid. , pp. 398-9^rirl. The amount borrowed was to be LI,000,000 raised in equal instalments over a period of eight years. It was proposed that the colony's Land Fund be used as security for the loan. 126 fftf’-f. Ibid. , pp. 648. L104,000 was realized at this one sale 127 HRA Series I, Vol. xxi, p. 544. Gipps did not approve of the increased bounty till March 3, 1840. 128 HRA Series I, Vol. xxii, p. 47. 129 Ibid. , p. 46. Vol. xxi, pp- 1967/, The permits were issued for families, single males and single females. In estimating these figures a family is con­ sidered as four persons. Lang, (op. cit., Vol. 1, pp. 307-8)claims that the aban­ donment of the government system was due to the machinations of merchants in London and Sydney who saw the bounty system as a source of profit. 236 would have ,but not "the heedlessness with which these new adventurers rushed 130 into the trade." Nevertheless in the light of the upsurge in land sales and the prosperous conditions in the early part of 1840 Gipps issued permits without reserve, believing that the number arriving could not exceed the 131 number wanted in the colony;nor the number which could be paid for.

The increased activity of bounty-migrant exporters became obvious in

London in 1840 as the number of their advertisements multiplied. This led to the decision that "an entire stop should be put to the Emigration managed by Government Officers," and caused the Colonial Office to call upon the

Colonial Land and Emigration Commission, which had been established in

January^ 1840, for a report on bounty emigration. As a result the Commission 132 was given the task of supervising bounty emigration. Meanwhile Gipps continued to issue bounty permits, expecting only a fraction of them would 133 result in the arrival of immigrants, but the London agents were actively- seeking the profits which could be made from the trade. The dismal newspaper reports of 1839 had given way to reports of booming prosperity and this diminished the reluctance to emigrate to New South Wales. This change alone

130 HRA Series I, Vol. xxii, p. 48. 131 HRA Series I, Vol. xxi, pf. 196r*7, 132 Ibid., p. 545-6. The Commission assumed this responsibility on January 25, 1841. 133 In September, 1840, Gipps asked the Emigration Commission to ensure that ten thousand emigrants were sent each year, making up any deficiency in bounty emigration by government emigration. He later claimed that the Commission should have interpreted this request as also ensuring that emigration did not exceed then thousand per year (Ibid. , p. 504). 237

did not create the surge of immigrants which arrived in New South Wales

in 1841, for the migrant-exporters had found that

it would not pay them to send their ships for emigrants to the northern ports of England, to Scotland, or to the North of Ireland; and they accordingly despatched their whippers-in to the South and West of Ireland, where emigrants, often of the most questionable character and qualifications, were engaged by the hundred, and shipped off, at a mere trifle per head .... By this means, the article, if of an inferior description, was certainly obtained at a comparatively small cost, and the profit of the speculation was consequently all the greater!'^

During 1840, 6,675 assisted immigrants arrived in New South Wales, for

about two-thirds of whom bounties were payable: during 1841, 18,986 arrived, 135 all of whom were bounty immigrants. Expenditure on immigration during 1840

was till,694 while land revenue totalled L316,626, so superficially the prog­

nosis looked favourable. However, Gipps had received a despatch late in

1840 outlining a new scheme for the sale of land in New South Wales which

divided the colony into three districts for the purposes of land sales and

provided that the proceeds of land sales in the Port Phillip district should

be used to finance immigration into that area, while the proceeds from the

134 Lang, ojd. cit. , Vol. 1, p. 309. Lang states that of the 25,330 assisted migrants who arrived between January 1, 1841, and June 30, 1842, 16,892 were from Ireland. The 1841 Immigration Report sought to exclude Roman Catholics. A public moa|-i,n^ Ky Ri'c1,irip was held in Sydney in September^ 1841^, to consider the Report's recommendatLonsff nKClC(e Broughton'snave S remarks/were« construed as evidence of sectarianism and/A a itpet>itian> f© wsus^sent to the Legislative Council asking for his removal ^R. Flanagan, The History of New South Wales,(London, 1862), Vol. II, p.30^

Various figures are quoted for the number of assisted migrants arriv­ ing during 1841. The figure cited above is from a local audit office report compiled in September, 1842, (HRA Series 1, Vol. xxii, p. 417). The figure given in Votes and Proceedings . . .: 1851 is 20,103. A report given by the local agent for immigration in May, 1842, gives the total as 19,521. (HRA Series 1, Vol. xxii, p. 45). 2 38

'old part' of the colony would be used to pay for immigrants coming to

Sydney. Now the proceeds from land sales in the whole colony had grown

from L112,282 in 1838 to L157,661 in 1839 and L316,979 in 1840, but this

increase was practically all attributable to sales of land in the Port

Phillip# district. TheinejSales had increased from L7,143 in 1837, to

137 L34,414 in 1838, L70,lll in 1839 and to L219,000 in 1840. This being

the case, if the proceeds were paid into separate treasuries, the amount

going into the treasury in Sydney might prove insufficient--at least this

was Gipps' reaction on receiving the despatch outlining the new system.

He continued to issue permits but from December 1, 1840, made them conditional,

i.e.("contingent on the state of our finances and on the ability of the

138 Government to pay them^."J and then at the end of Januaryy 1841, apprised

the Secretary of State about his fears concerning the local Treasury's

ability to meet the cost of the flow of immigrants coming to Sydney.

Lord John Russell was amazed to learn that there were permits for

64,515 immigrants outstanding on January 31^ 1841, on which the sum of

L979,652 would be payable^ if the permits were fully utilized. While he admitted that Gipps had been subjected to pressure from local interests, he censured him and instructed him that no further bounty orders "exceeding the Net amount of the Land Revenue clearly applicable for that purpose during the next succeeding year" were to be issued. For his own part,

l^HRA Series I, Vol. xxi, p. 124.

137 Proceeds from land sales in the 'old part' of the colony had been L78,388 in 1838, L87,550 in 1839 and L97,879 in 1840.

138 HRA Series I, Vol. xxi, p. 503. He issued conditional permits for 6,800 immigrants between December 1, 1840, and January 31, 1841 (Ibid., p. 197) 239

Russell stated he would seek to stop "the execution of these Bounty Orders _ _ 139 beyond the extent . . . /of/ the net Land Revenue of the year "

Meanwhile in the colony land sales began to fall: according to colonists because of the increase in the upset price of land at government auctions from five to twelve shillings per acre made in 1839; according to Gipps because of the amount of land being put up for sale privately, and because with the cessation of convict assignment newcomers no longer bought 140 land to qualify for convict labour. The amount of sales dropped off sharply early in 1841 for which year the proceeds of land sales totalled only

L90,388. By September^ 1841, the decline in land revenue, the rapid influx of immigrants into the colony, and the British government's aversion to the raising of a loan for immigration forced Gipps to issue a notice stating that in all probability the government would not be able to pay for conditional 141 bounties (i.e., permits issued after December 1^ 1840). This still left the colonial government liable for just on L600,000 worth of bounty orders still in circulation, but by this stage Lord John Russell, the Secretary of

State, had stepped into the picture. After the receipt of Gipps' despatches of January 31, and February 1^ 1841, he had ordered an investigation of bounty emigration by the Land and Emigration Commissioners. As a result

139 Ibid., pp. 430-2. Russell 's despatch was sent in July, 1841 140 HRA Series I, Vol. xxii, p. 44.

■^HRA Series I, Vol. xxi, p. 505. 240 he had a notice issued in London on July 31y 1841, stating that bounty orders had to be presented at the Commission's office for approval before September 1 and that no bounty would be paid for immigrants leaving Britain after 142 November ly 1841. Later Lord Stanley, who had replaced Russell, announced that bounty orders (permits) issued after July ly 1841, would not be deemed valid, and that no bounty emigration from Britain would be permitted till

August^ 1842, by which time he hoped to have sufficient information concerning land revenue and immigration expenditure to permit a decision to be made concerning its continuance.

Gipps did not learn of this drastic solution to the problem created by the over-issue of bounty orders,till the very end of 1841. Previously, in November^ 1841, he had called for a reduction in the number of immigrants 143 in 1842 to four to five thousand, and proposed a loan to finance immigration

A committee of the Legislative Council examined the possibility of raising funds by issuing debentures in November^ 1841, but though the Council accepted its recommendation for debentures secured on the land revenue this provoked 144 a violent reaction in the colony,and a petition to the Secretary of State.

142 Ibid, p. 550. After the Commission assured control of bounty emigration the locally-issued permits had to be presented in England for approval. Nearly eleven thousand were presented during August, 1841. 143 / Ibid . , pp. 574-r^. In September^ 1841, he had claimed that the colony needed between eight and ten thousand immigrants a year. 144 Flanagan, ££. cit., Vol. II, p. 27-30. See also HRA Series I, Vol. xx, p. 606 where Gipps stated that the proposal to raise debentures was unacceptable to the Legislative Council. 241

Gipps' only hope then was land sales. He advertized land to be offered at auction in February^ 1842, but with little success (the proceeds for government land sales for the whole of 1842 was less than L15,000)

6,823 assisted immigrants arrived during 1842, financed partly from land 145 revenue and partly from debentures issued in Aprils 1842, but the slow sale of these debentures led Gipps to inform the Colonial Office in July^ 146 1842, that he could not recommend the revival of emigration, consequently only eleven assisted migrants arrived during 1843.

Nearly fifty-five thousand assisted immigrants arrived in New South

Wales during the period 1832-43. One third of the total were adult males, fifty per cent of whom arrived in 1841-2, and ninety-eight per cent, during the period 1837-42. The average number of assisted migrant arrivals during the period 1838-42 was 9,600 per year--which approximated to the ten thousand per year recommended on several occasions by Legislative Council committees-- but there was not an even flow of immigrants (see Figure 5). Nor did their arrival satisfy the demand for shepherds: many had large families and as such were not wanted by pastoralists while many would not accept employment as shepherds, as evidence presented to the 1843 Select Committee on Immigration and the 1843 Select Committee on Distressed Labourers showed.

The call for additional immigrants continued even after the huge influx of 1841^but by then the nature of the immigration problem had changed. As

Gipps pointed out in a speech delivered to the Legislative Council on August 9^

— ~ " “ L49,500 worth of debentures at 8 per cent were issued (HRA Series I, Vol. xxii, p. 135). 146 It became known in Sydney that Gipps had written discouraging emigration This provoked very adverse comment in Sydney newspapers, e.g. see The Australian August 1 and 3, 1842. 242

FIGURE 5

The Number of Assisted Immigrants Arriving 147 in New South Wales 1832-50 20

(’000)

1840

Source: Votes and Proceedings . . 1851

1842, concerning the report of the 1842 committee on immigration:

Our position now is, that we want immigrants, but have no money to pay for them. Why do we want immigrants? Because the capital of the colony is rapidly increasing, and every interest is extending itself. Such being the case, why have we no money? Simply because the funds dedicated to the support of immigration are derived from the sale of land and at present we can sell no land. So far we are

The totals do not include immigrants brought under the bounty scheme for whom bounties were not paid on arrival. Between January 1, 1841, and April 30, 1842, bounties were disallowed for 1,112 immigrants. 243

all agreed. But why, again do we sell no land? Because, it is answered, the minimum price of it has been raised.

This explanation was too facile for Gipps, nor were its implications acceptable, for if it were the case, land sales could be revived by lowering the minimum price at government land auctions. Yet the explanation and the solution represented the opinion of the majority of colonists

The upset price of five shillings an acre set in 1831 was based on data then available but considered to be of dubious quality, so the price was set 149 in the expectation of some future increase. The regulations set out in

Ripon's despatch of July 10, 1831, gave the governor power to set a higher upset price for land of superior quality but none to set a lower price. When the settlement of Port Phillip was sanctioned by the Colonial Office, Bourke was informed that he could set a price lower than five shillings for land there if he considered the circumstances warranted this departure. As it turned out he did not use this discretionary power but its announcement cuased some concern to the South Australian Commissioners. On October 12,

1836, their chairman, Torrens, wrote to Glenelg pointing out that if land were sold more cheaply in the new areas being settled on the southern coast of New South Wales the revenue raised would be insufficient to finance the introduction of the amount of labour which would be demanded. Since these

Gipps' speech was reported in the Sydney Morning Herald on August 10, 1842. He enclosed a copy in his despatch of September 20, 1842. 149 HRA Series I, Vol. xviii, p. 681. See also Burroughs, op. cit., p. 203. 244

areas were adjacent to the settlement of South Australia and communication

between them was easy he foresaw the development of Port Phillip as leading

to a drain of labour from South Australia, and so called upon the government

to set a price on lands adjacent to South Australia (where the price was

twelve shillings per acre) sufficiently high "to provide a supply of

labour proportionate to that supplied to South Australia.

Torrens' appeal had no immediate effect. Under-Secretary Stephen^

replied on October 27g 1836, stressing the difficulties of restricting settle­

ment in New South Wales, and pointing out that the squatters there "find in

the high price of land some of the advantages which a smuggler in other

countries derives from a high rate of duty:" their activities become

acceptable to the local society}^ To raise the price of land would therefore

simply lead to an extension of squatting and add to the colony's problems.

Furthermore Port Phillip* was within the colony of New South Wales where

the price was five shillings an acre^and^. since the British government

"wanted to arrest the evil of unlicensed occupation of the newly explored

territory," it had given Bourke permission to offer land at a price lower

than five shillings. As settlement progressed the value of land would

rise and a higher price could be imposed, but, Stephen* implied, in the

present circumstances, the price should remain what it was. While Stephen*

defended the status quo, Glenelg decided that he should at least explore

the question of the adequacy of the upset price of five shillings and in his

150 Ibid., p. 682. 151 Ibid., p*. 681m4. 245 despatch of February 15, 1837, asked Bourke to report on this question.

He referred to the prices which had been paid recently at government land sales and cited them as possible evidence justifying an increase, and went on to suggest that if Bourke concurred in this assessment, he should increase 152 the price immediately.

Bourke was opposed to any increase, and in his despatch of September 6,

1837^ set out his arguments against such a change. He repeated Stephen^* point that dearer land would intensify the squatting problem, and added that an increased price would deter the emigration of person with "small capital" who could not afford to purchase the large area needed to found a "grazing establishment" if the upset price were increased to twelve shillings. More­ over, "the Crown land now in the market forms only a surplus, in many cases they may justly be called a refuse, consisting of lands which in past years 153 were not saleable at any price and were not sought after even as grants:" to seek a higher price for them would decrease land sales. But beyond these practical difficulties, Gipps saw the issue as a conflict between an artificially set price and a price naturally established by competition.

While a set minimum price could not prevent land being sold below its "true market valuecompetition could, and competition at government land sales was intense, due partly to purchases by land speculators. The advantages of competition and the disadvantages of an increase in the minimum price led

152 Ibid., p. 681 153 HRA Series I, Vol. xix, p. 78. 246

Bourke to recommend that the system be left as it was.

Nearly a year elapsed, then on August 9^ 1838, Glenelg sent a despatch ordering Governor Gipps to increase the upset price for land "of ordinary quality" to twelve shillings per acre. He justified the change by arguing tha t:

as regards the encouragement of Emigration, the measure has to a considerable degree succeeded, but the extent of Land which has been sold and the increasing want of labour affords decisive proof that the check, which it was intended to impose on the undue^^spersion of the Inhabitants of the Colony, has not been sufficient.

Gipps was to increase the price immediately and to watch its effects. If

"the extension of population into the unsettled Districts should still proceed with a rapidity beyond what is desirable, and /if7 the want of labour still continues to be seriously felt," he was to check the sale of land by ration­ ing the quantity being offered for sale and was then to further increase the . 155 price.

The argument advanced by Glenelg reflects a singular lack of appreciation of the colonial situation on the part of the Colonial Office. Stephen# had spelt out the direct relation between the price of land and the extension of occupation in New South Wales, and Glenelg had shown an awareness of the colony's peculiar problems when sanctioning the Port Phillip settlement.

The only possible explanation of Glenelg's inconsistency is that in both instances he was offering a rationalization for his reaction to pressure

— - Ibid., p. 537.

Ibid., p. 538. 247

imposed on him by powerful interest groups: in the first case by those backing the Port Phillip settlement; in the latter those associated with

the South Australian venture.

Gipps received Glenelg's despatch on January 16^ 1839, and a week later

issued a notice that the upset price was to be increased at all future

government land auctions. The notice was hostilely received not only 156 because of the increase (which was not altogether unexpected), but also because Gipps had applied the increase to all future land sales^whereas in

Van Diemen's Land*,land already advertized at five shillings was exempted.

In the light of this latter situation Gipps issued a second notice on

February 6, 1839, stating that land previously advertized at five shillings was to be auctioned with that upset price in operation}"^ Two auctions

were held within six weeks of the issuing of this second notice: at the

first, 21,807 acres in the old part of the colony were sold at an average

price of slightly over six shillings per acre; at the second, 54,348 acres

in the old part^at an average of just over five shillings per acre, and

15,576 acres at Port Phillip at an average of over thirteen shillings per 158 acre The prices obtained for land in the old part of the colony, Gipps sug­

gested to Glenelg, showed that either ordinary land was not worth more than

156 Burroughs, ojd. cit. , p. 204, shows that as early as 1835 there had been an idea in New South Wales that the price would be increased to the equivalent of that in South Australia. l^He stated in his despatch of April 1, 1839, that at least 306,000 acres had been so advertized (HRA Series I, Vol. xx, p. 79). 158 Ibid. 248 five shillingSjOr that purchasers were unwilling to give a higher price.

Even before Gipps' report reached the Colonial Office, the Secretary of State, Normanby, sent a despatch suggesting that "as Port Phillip is so attractive to settlers, /it would be desirable/to place the highest minimum price on land there which may be compatable with the objects contemplated

159 in my predecessor's despatch." The imperial authorities seemed determined to obtain as much revenue as possible from the sale of land, at the same time subscribing to Wakefield's dictum that a higher price would restrict dispersion and also guarantee a sufficient supply of labour. So when Gipps continued to complain during 1839 of a shortage of labour and of the in­ sufficiency of land revenue, the solution which would occur to any supporter of Wakefield's theory was to increase the price of land, and this was one of the main recommendations made by the newly-appointed Land and Emigration

Commissioners in early 1840. These recommendations were embodied in a new set of regulations governing the sale of land in the colony issued "under the royal signet and sign manual" on May 22, 1840.

Glenelg forwarded the new regulations in a despatch dated May 31, 1840, received by Gipps on November 19, published by him in the Government Gazette on December 5;and laid before the Legislative Council on December 10, 1840.

They provided that (i) for purpose of land sales the colony was to be divided into three parts - the Northern, Middle and Southern Districts; (ii) land was to be sold in the Northern and Southern Districts at a fixed price - LI

Vol.T Quoted by Braim, op. cit. ,/ p. 128. 249 per acre; (iii) land in the Middle District was to be auctioned with an upset price of twelve shillings per acre; (iv'' in the Southern District, except for towns where land had already been auctioned, town allotments were to be sold at the fixed price of L100 per acre; (v) money could be deported by emigrants with the Colonial Agent-General in London entitling them to select land on arrival; and (vi) the proceeds of land sales in 161 each District were to be paid into separate Treasuries.

As might be expected the new regulations created turmoil in Sydney.

Fears were expressed that they would lead to "the total or all but total extinction of the Land Revenue of the Central District of the Colony, and the consequent inability to import Emigrants in sufficient numbers ....

/for/ in the Central District . . . very few lands of any value remain to 16 2 be disposed of." There was also the fear that if land was to be sold at fixed prices with an unrestricted right of selection, squatters could be dispossessed of all the land they occupied or else lose access to the water on the land which would be the equivalent of losing the land. Such appre­ hensions led to an outcry against the new regulations. Four days after their presentation to the Legislative Council, it addressed a petition to the Queen expressing concern and asking in particular that the southern

The Middle or Sydney District was defined in terms of the nineteen counties proclaimed in 1829. Its southern boundary was to be the southern boundary of the two most southern counties and the Murrumbidgee River to the eastern boundary of South Australia. Its northern boundary was to commence at the mouth of the Manning River and then follow the northern boundary of the northernmost counties proclaimed in 1829. (Macquarie county which was added after 1829 not included.) See C. M. H. Clark, Select Documents in Australian History 1788-1850 (Sydney, 1950), pp. 235-7. 161 HRA Series I, Vol. xx, pp. 641 _et seq.

162HRA Series I, \fo 1. xxi, pp. 118-9. 250 boundary of the Middle District be the Murray River and the northern,the twenty-eighth parallel of latitude^

CThree weeks later a public meeting was called in Sydney to protest

anM against the dismemberment of the colony, whiok adopted petitions for 163 despatch to the Queen and the parliament.

The Colonial Office was bombarded with petitions from the Legislative

Council, the "landholders and merchants" of New South Wales, and from 164 interested parties in London, while Gipps voiced his opposition in a

"Memorandum on the disposal of lands in the Australian Provinces" sent on 165 December 19, 1840. In it he argued cogently against the Wakefieldian principles underlying the new regulations and their inapplicability in

New South Wales:

But if the theory, by which it is sought to make persons cultivate lands in Australia in the natural order of their advantages, be al­ together incapable of good, that, which would seek to prevent the dispersion of the People, is only incapable of mischief, because it is utterly impossible to reduce it to practice. As well might it be attempted to confine the Arabs of the Desert within a circle, traced upon their sands, as to confine the Graziers or Woolgrowers of New South Wales within any bounds that can possibly be assigned to them; and as certainly as the Arabs would be starved, so also would the flocks and herds of New South Wales, if they were so con­ fined, and the prosperity of the Country be at an end.166

Though the petitions were accepted at a meeting held on January 7, accusations were made that the meeting had been 'packed' so a second meeting was held on February 4 where the petitions were once again adopted Opposition to their adoption came from certain emancipists, particularly Macdermott, who argued that if large graziers continued to dominate the colony and shape it to their own purposes then in the future the colony would have only two classes-- the very rich and the very poor. (See Sydney Morning Herald, February 5, 1841.) 164 See the petition drawn up by William Macarthur in September, 1841, (Macarthur Papers, Vol. 92 - Mitchell Library).

165hra Series I, Vol. xxi, pp. 122 et seq. For comments on the memorandum see Roberts, op. cit., pp. 107-110 and Burroughs, op. cit., pp. 236-45. 166 HRA Series I, Vol xxi, p. 127. 251

The various representations were received in London just after a Select

Committee of the House of Commons, having examined the affairs of South

Australia, had condemned the fixed price system of selling land. The

Addition of the results of its deliberations and the forceful arguments advanced by Gipps led Lord John Russell to reinstate the auction system throughout the colony in August 1841. The despatch which carried news of this modification to Gipps was followed less than two months later by one sent by Lord Stanley (who had recently replaced Russell) informing

Gipps that the whole question of land sales was being examined and would be the subject of parliamentary legislation in the following year. Stanley's despatch showed the way the government was thinking and suggested the form the future legislation would take,for in it Gipps was instructed to set an upset price of twenty shillings per acre in the Port Phillip district. It was early in 1843 that details of the new legislation (an act for Regulating the Sale of Waste Land belonging to the Crown in the Australian Colonies,

5 & 6 Viet. c. 36) passed in June/ 1842, arrived in the colony. It confirm­ ed the colonists' worst fears, for it raised the upset price throughout the colony to twenty shillings per acre!-^

Throughout the 1840s colonists argued that the increase in the upset price of land diminished the land revenue so checking immigration and thereby

167 For a summary of the act's provisions see Clark, 0£. cit., pp. 239-42 252 retarding the progress of the colony „ The imperial government’s decisions to raise the price from five shillings to twelve shillings, and from twelve to twenty shillings, colonists variously attributed to its

"determination to carry out the system of Mr. E. G. Wakefieldf"^^the pressure of South Australian interests, or to cupidity. "There is not the slightest doubt," the 1849 Select Committee on Crown Lands reported,

"that the /I8427 act was passed in order to effectuate objects precisely the contrary of that restrictive policy attributed to it,and proceeded to quote from a despatch sent to Gipps by Lord Stanley in October^ 1841, in which he had written:

Judging from what has taken place in South Australia, Port Phillip, and New Zealand, I have little doubt that in the as yet unsold districts of the Colony, the imposition of a considerably higher price, at least up to twenty shillings per acre, would not check the purchase of land, and if not, would tend of course materially to increase the amount realised for the land fund, on the extension and application of which, at this juncture, so much of the prosperity of New South Wales may probably depend.

Data Gipps presented in his memorandum on the sale of land (sent in

December^ 1840) amply justified Stanley’s observations. It showed that land revenue had risen from L112,802 in 1838, to L157,661 in 1839 and to

L316,979 in 1840, while average prices received had continued to rise, particularly in the Port Phillip area, despite the increase in the price

This argument appears in numerous Select Committee reports, e.g. the report of the 1843 committee on the Act of Parliament Regulating the Sale of Crown Lands; the reports of the 1842, 1845, 1847 and 1849 committees on immigration; the 1844 report on Crown Land Grievances; and the report of the 1849 committee on Crown Lands. 169 "Report of the Select Committee on Immigration", p. 1, Votes and Proceedings . . .: 1847 253 made in 1839y (see Table 2). While later the error of basing official prices of* 'fictitious values' set by speculative demand could be pointed out}^when Stanley set his price all he could see were apparently booming conditions. Admittedly Gipps had already written of commercial embarrass­ ments but the Colonial Office had found it hard to reconcile such reports with the evidence it had of the colony’s progress: "how could a Colony be otherwise than prosperous, where servants had good wages and abundant food? Or how could a Community be in difficulty who exports remained undiminished, and whose revenue continued to increase?"^^ yet if the

Colonial Office in 1841 did not adequately recognize the implications of the situation existing in New South Wales ,this did not stop the British

Prime Minister informing the House of Commons in late 1841 that the New 172 South Wales Treasury was bankrupt: still the government proceeded in 1842 to increase the price of land, apparently in the belief that this could replenish the Treasury.

TABLE q Average Price per Acre Obtained at Government Land Auctions

in New South Wales 1838-40*

PORT PHILLIP 'OLD PARTS OF THE COLONY' Rural Land Town Allotments Rural :Land Town Allotments 1838 13s . 3d. L213 11s. 7d . 5s . 5d. L17 7s. 4d. 1839 LI 11s . lid. L137 19s. Od. 8s . 2d. L29 Os. lid. 1840 LI 12s . lid. L487 16s. 2d. 13s . 2d. L69 3s. 4d. *A11 figures given to nearest penny Source: HRA Series I, Vol. xxi, p. 124.

^^See 'Report of the Select Committee on Crown Lands,' Votes and Proceedings . . .: 1849. ^^The petition drawn up by William Macarthur (see note 161). 17 9 HRA Series I, Vol. xxi, p. 686. 254

By early 1841 the increased upset price of land was being blamed by colonists for the fall in land revenue which was then evident, and though large numbers of immigrants were arriving, complaints were still made 173 about labour shortages. In July/ 1841,- a petition was presented to the

Legislative Council by large pastoralists requesting the importation of

Indian coolies since labour was in such short supply; but the Council was 174 not convinced. Nevertheless both of the major Sydney newspapers continued to support the move to introduce coolie labour and called for support for a second petition circulated in 1842^^

This was only part of the insistent call for immigration, which had as its obverse^consistent complaints concerning the extinction of the land fund, but complaints were more numerous than suggestions about how to re­ plenish the funds. Raising a loan overseas was the main remedy suggested, while in August/ 1842^ Bishop Broughton suggested selling to the squatters some of the land they occupied outside the limits o>f locations .Wt Neither scheme was acceptable to Gipps, who refused to consider other means of relief till such times as colonists had helped reduce governmental expenses, (he advocated using the resultant savings for immigration)and had shown a willing­ ness to provide some of the revenue for immigration.

173 e.g See The Australian, April 27, June 29, August 7, 1841

■^^Flanagan, ojd. cit. , Vol. II, p. 32.

^^See Sydney Morning Herald, July 24, 1841; The Australian, August 31, 1842. A petition was presented to Gipps in May, 1843, seeking permission to import coolies from India. A petition opposing coolie immigration signed by over four thousand persons 'principally of the working classes' had been presented in March, 1843, (HRA Series I, Vol. xxii, p. 702). l^See The Australian, August 3, 10, & September 19, 1842. Broughton had suggested selling each squatter part of their run at twenty shillings per acre and then allowing them lease twelve to fourteen times the area they purchased. Gipps referred to Broughton’s scheme in his speech of September 9, 1842. 255

Gipps could not see the increased price of land as the cause of

New South Wales difficulties and therefore could not agree with the idea that the upset price of land should be reduced so as to revive the land fund.

But it will be asked, if land in large quantities be not sold, how are we to get money with which to pay for immigrants? This question I will answer by another: who are they who want immigrants the worst? The reply must be - the squatters; and next to them the parties who received in times past large grants of land gratuitously. If the land fund fail, therefore, these are the parties to whom we must look for funds wherewith to bring immigrants to the colony!^

Squatting fees provided little revenue. The 1836 act (7 Wm. IV, no. 4), which was amended and continued for three years in an 1838 act of the

Legislative Council (2 Viet. no. 19), provided for the payment of L10 per annum for a licence to graze livestock outside the limits of location.

Then in 1839 a new squatting act (2 Viet. no. 27) was passed by the Legis­ lative Council - 'an act further to restrain the unauthorized occupation of Crown lands, and to provide the means of defraying the expense of a

Border Police.' As described by Gipps:

The Act . . . proceeds uon the same principle as the prior ones, but goes beyond them in the powers which are given to the Commis­ sioners, and also authorises the levying of a tax or assessment on Cattle depastured beyond the Boundaries to defray in part the expense, which must be incurred for the maintenance of the Police. The assessment, which is fixed at Id. per annum for every sheep, 3d. for every head of horned cattle, and 6d. for every horse, depastured on land beyond the Boundaries, is expected to produce about L7,000 a year, while the Licences at L10 each, which are to

177 Gipps' speech to the Legislative Council, September 9, 1842. 256

be granted as heretofore for the occupation of the land, will produce probably from L5,000 to L6,000 a year; and though these two sums together form but a small amount for the protection of the immense tract of Country extending from Port Phillip almost to Moreton Bay, I could not as a first experiment propose the raising of a larger sum;

The act was put into operation by regulations issued on May 21, 1839, when nine squatting districts were proclaimed) for each of which there was to be a Commissioner and a detachment of mounted police. The provisions laid down in this act were continued^by an act passed in 1841 (5 Viet, no.l)^ till June 30, 1846.

The area occupied by squatters expanded during the late thirties and early forties. This dispersion was the antithesis of the concentration sought in the imperial government's land sales regulations but, in Gipps' eyes, it was inevitable. By the beginning of 1844 the area occupied stretched through fourteen degrees of latitude, from Hervey Bay (present- day Maryborough) in the north to Wilson's Promontory in the south, with 179 "an average width of four degrees of Longitude" (see Figure 6). One sixth of the colony's population was domiciled in the squatting district

(9,885 persons) and nearly two-thirds of the colony’s sheep (3,023,048) 180 were grazed there, but the net revenue derived from the occupation of

178 ^ HRA Series I, Vol. x^x, p. 90. The main purpose behind the establish­ ment of the border police was to put "a stop to the atrocities which have been committed on them (aborigines) and by them" (p. 91). For a discussion of the 1839 act and local reaction to it, see Roberts, ££. cit., pp. 88-92. 179 HRA Series I, Vol xxiii, p. 510. For an indication of the extent of the area occupied by 1844, see the maps in Roberts, ££. cit. , pp. 130, 139, 151, 174. 180 In reporting the livestock statistics for squatting districts Gipps pointed out that they were possibly "below the truth" for the stock returns were collected for assessment purposes. (HRA Series I, Vol. xxiii, p 510). _

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n, 258 the land in these districts was meagre.

Lord John Russell had noted in his despatch of June 20, 1841, that the amount of revenue derived from the depasturing licences and stock

loAi assessments wot*a small compared with the value of the land occupied^and suggested that they should be raised to five or six times their current 181 level. Gipps was unwilling to act on this suggestion at the time he received it, but in his speech of September 9, 1842, he referred to it^ and went on to indicate his intention to make changes in the system of squatting licences "as soon as the present despondency shall have passed awayi", Gipps did not go on to define what these changes would be but he said sufficient to arouse concern. The waste lands beyond the bound­ aries occupied by squatters represented a source from which revenue suffi- cvxdd be cient for the colony's needs^, he asserted, but since he was still uncertain about the exact nature of the legislative changes being made in Britain concerning land sales, he did not think the scheme suggested by Bishop

Broughton appropriate. Furthermore he made it clear that the squatting districts were the main source he would immediately consider: he would not seek the British government's permission to raise a loan "until all other means of providing money for the purposes of immigration shall have been tried"^and even then^he would seek a loan only sufficiently large

"to equalize, from year to year, the supply of immigrants."

181 HRA Series I, Vol. xxi, p. 404. 25 9

To Gipps, "the squatting system has been so extended as to have become the system of the colony," therefore it followed that it was the squatting system which would have to finance immigration. The implications of the argument he presented to the Legislative Council must have been clear, so thereafter the louder the cries in the colony for the introduction of more immigrants, the nearer came the threatened changes. Perhaps Gipps may have waited much longer than he did to institute his changes but towards the end of 1843 he learned that the British government had decided to 182 resume emigration to New South Wales. Contracts had been made for carry­ ing the migrants out^and the shippers were to be paid after delivering the migrants in Sydney, using funds derived from the sale of land, and t if this were insufficient, from debentures issued in the colony paying six per cent interest. Gipps did not receive the news with enthusiasm and quickly replied stating that there were no funds available, and that there was 18 3 considerable unemployment. However, there was nothing Gipps could do to stop the flow: what he had to do was find the funds to pay for it and this meant issuing the debentures authorized by Lord Stanley at a rate of interest

182 HRA Series I, Vol. xxiii, pp. 136-9. The decision had been made in August, 1843, and was conveyed to Gipps in a despatch dated September 17, 1843. The decision was discussed at a public meeting held early in January, 1844, to consider the distress of the unemployed in Sydney. It was regarded with ;jome apprehension: its undesirableness--it was claimed--was shown by the emigration of over seven hundred persons during 1843, many to Valparaiso. It was also claimed that the extent of the need for immigrants had been ex­ aggerated by 'interested' persons. Flanagan, ojd. cit. Vol. II, p. 71.

IQ O j HRA Series I, Vol. xxiii, p. 24?. far below the current market rate in Sydney. On January 29, 1844, about

L40,000 worth of debentures were advertized but tenders for only L8,625

wcfth were received - L5,000 worth by the Savings Bank which was a semi-

governmental institution}^

This was the situation Gipps faced in early 1844, when - to quote

J. D. Lang's invective - "he bethought himself of a new way of 'raising

the wind,' at the expense of a class of the colonists who are technically 185 called the Squatters." But the changes Gipps made in Aprils 1844, were

not rashly made: the time of their appearance seems to have been obviously

related to the need to raise finance to pay for immigrants (the first ship­

load had arrived in February/ 1844) but the new regulations were the product of 18 6 Gipps' consideration of squatting over a long period.

The new regulations were issued in two parts: what Roberts has termed

the occupation regulations appeared in the Government Gazette on April 2,

1844, and the proposed purchase regulations in the Sydney Morning Herald 18 7 on May 13, 1844. The former provided that (i) "parties occupying Stations

in separate districts, notwithstanding that the same may be contigous, shall

184 Ibid., p. 447. In May, 1844, debentures for L42,600 were issued: tl7,600 were tendered for at par and the remainder at a discount of two per cent (Ibid., p. 598).

Lang, 0£. cit., Vol I, p. 298 186 HRA Series I, Vol. xxiii, p. 548. 187 See Burroughs, up. cit., p. 304. 261 be required in future to take out a separate Licence for each such district, 188 and to pay the established fee of Ten Pounds for the samef" • and (ii) persons occupying new stations even in districts where they already held a station, were to take out a separate licence for each new station. There were also provisions which were to apply from July 1, 1845, viz , a separate licence was to be taken out for every station; that no station was to be more than

twenty square miles, except in those cases where the Commissioner of Crown

Lands certified that a larger area was required to depasture 4,000 sheep or

500 cattle; that & stations "at a greater distance than seven miles from any other occupied by the same party will be deemed a separate Stat ion^and that 'ho one Licence will cover a Station capable of depasturing more than

4,000 sheep or 500 head of cattle, or a mixed herd of sheep and cattle, equal 189 to either 500 head of cattle or 4,000 sheepx" .

Gipps forwarded a copy of his regulations to Lord Stanley on April 3, 190 1844, with a despatch justifying the issuing of them, and he elaborated on 191 the reasons for the regulations in a despatch dated April 16, 1844.

In these two despatches he explained why he had issued the regulations; why

According to the regulations issued on May 21, 1839, "Persons desirous of depasturing in more Districts than one must make separate applications, and take out separate Licences for each, but the fee will be chargeable to the same party for the same period upon one Licence only, for two contiguous Districts " (Clark, 0£. cit , p. 233). This part of the new rgulations sought to bring paractice into line with the former regulations, except for the provision con­ cerning contiguous districts

l^Clark, ££. cit. , pp , 246-7. 190 There is some doubt as to whether he forwarded both sets of regulations or just the 'occupation regulations' on that date, (see Roberts, o£. cit., pp. 240-2) though in the accompanying despatch he discussed principles involved in the purchases regulations. See HRA Series I, Vol. xxiv, pp. 507 et seq. Roberts' comments regarding Gipps' motives are to a degree negated by the marginal note in the despatch (Ibid., p. 515). The regulations as printed in the Government Gazette were somewhat vague in some parts, e.g., they left the impression that a separate licence of E10 had to be paid for any sheep over four thousand on a station. Gipps had to clear up some of these points and indicated the changes in his despatch. 262 he had issued them when he did; why he had used his executive powers to issue these regulations; and why the form of the regulations was what it 192 wa s .

The regulations were partly designed to overcome evident deficiencies in the squatting system and partly to ensure a revenue for immigration. As a result of the distressed conditions of the previous few years many settlers, having lost their properties situated within the limits, were forced to go

"into the Bush with their wives and families". Previously the population in the squatting areas had been almost exclusively male so the lack of churches could be deprecated and that of schools tolerated, but as families moved into these areas Gipps saw the ominous possibility of "a race of Englishmen . . . speedily springing up in the state approaching to that of untutored barbarism".

If the government were to avoid the reproach of having allowed this situation to 193 develop, it had to extend the limits within which sales were permitted and give squatters some means of acquiring a permanent interest in some part of the land they occupied: they should be given the opportunity to obtain "on easy terms, what may be called for every one, a Homestead/".

This would solve one immediate problem confronting colonial society: there was also an immediate problem facing the colonial economy--the need for 194 immigrants « Land sales had all but ceased: some alternative source of revenue

191 Ibid., pp. 545-9. 192. 'The following discussion is based on Gipps* two apologia. 193 1, , , These limits had been extended" in the early forties by the establishment of three counties in the Port Phillip area, one at Twofold Bay and one at Moreton Bay (see figure 6). ^ Gipps now suggested establishing five or six new counties.

194, The revenue from the Land Sales in 1844 was only L7,402. 263

was needed, and the lands outside the limits were the obvious one. Large

pieces of these lands were occupied by squatters paying just L10 per year

for one licence, so by increasing in some way the amount paid for such oc­

cupation not only would there be an immediate increased revenue from licence

fees, but it would also ensure that land was not just occupied to the detri- 195 ment of future purchasers. If "proper protection be afforded to the

unsold Lands of the Crown>"JL50,000 per year could be raised for immigration^

according to Gipps, though he did not specify just how this sum would be

raised.

Lord Russell had suggested in 1841 that the licence fee for squatters

should be increased^but circumstances in the colony at the time this suggestion

was received forestalled such a change. Now, rather than increase the cost

of the licence)Gipps felt that it would be better to retain the fee of L10

but "limit the quantity of Land to be occupied or the quantity of Stock to

be depastured under a single Licence^". This would bring more revenue; would

ensure that the occupiers paid in proportion to the amount of land held; and

would help obviate abuses then prevalent in the squatting districts,where

large occupiers who "may require for their own use only a small portion of

Land and Emigration Commissioners had submitted a report to Lord Stanley in July, 1842, pointing out the difficulties squatting could present when the progress of settlement made the sale of land they occupied desirable. Stanley forwarded the report to Gipps in September, 1842. (HRA Series I, Vol. xxii, pp. 254$ 264 what they hold, prevent the occupation of it by others. It was

Gipps' contention that many large squatters were attempting to use the 197 land they claimed to resurrect their fortunes: stations were "articles of common traffic in the markets^"-, sub-letting of stations was becoming common. Persons monopolizing large areas by mere occupation were exploiting

Crown lands and Gipps saw one of his tasks as restricting "the cupidity 198 of the great Squatters^" } which could be done by increasing the licence fee in such a way that its incidence fell most on the large squatters.

While the immediacy of the need to forestall the growth of social evils accentuated by the changing composition of population in the squatting districts, and of the need to establish a fund for immigration were important factors in determining Gipps* timing of the issuing of the regulations, they were not the only factors. He had wanted to change the regulations for some time and in his 1842 speech to the Legislative Council (which he had subsequently had printed) had indicated his intent but because of the econ­ omic conditions in the colony }and "the press of other important matters growing out of the recent changes in its constitution^"^Gipps had deferred action. Since the normal term of service allowed a colonial governor was nearly expired, and since Gipps did not wish to leave the problem of reform- 199 ing the squatter system to his successor, he decided early in 1844 that he

^^See Willmington's letters, HRA Series I, Vol. xiii, pp. 790-^; Vol. xxiv, pp. 562-7, 733-9. 197 Ibid. , p. 250

1 Q8 ibid., p. 525. 199 The act governing squatting was due to expire in 1846, after Gipps' normal term of office would have been completed. 26 5 could wait no longer. He consulted his Executive Council and on their advice issued the occupation regulations on April 2, 1844, putting into immediate effect one measure which simply reasserted a regulation set down in 1839, set down an additional measure which would effect only large squatters, and gave notice of more major changes.

It was primarily a sense of urgency which led Gipps to utilize his executive powers in issuing the new regulations. Squatting hitherto had been regulated by acts passed by the Legislative Council, though the governor might have issued licences for the occupation of Crown lands, this right being "incidental to the Office of the Governor" - or at least it was in Gipps’ opinion?*"^ The 1842 Land Sales Act (5 & 6 Vic. c.36) had specifically given the governor this power and Gipps interpreted this to mean that it enabled him to fix the price of the licence and the extent of land held, "subject to the approval of Her Majesty's Government." He might have chosen not to use these powers and sought the Legislative

Councilfe approval for the amendments necessary in the squatting system, but he recognized that the Council, which had become partly elective in 1843, 201 was dominated by persons with pastoral interests. During the 1843 session

^^HRA Series I, Vol. xxiii, p. 548. 201 Under the new constitution the Legislative Council comprised of six official, appointed members, six unofficial, appointed members and twenty-four elected members. Of the twenty-four persons elected in the Council in 1843, the occupation of twelve was given as "settler" while others such as Nicholson, Macarthur and Wentworth had large pastoral holdings. Among the six unofficial nominees, at least four had pastoral properties. (Ibid, p. 42.) 26 6

the council had passed acts such as the Lien-on-Wool and Insolvent Debtors'

Act designed to ease the lot of pastoralists, so obviously it would not

favourably consider any measure which, could be construed as adversely affect­

ing pastoralists' interests. If he was to implement the changes he considered

desirable Gipps had to do so by exercising his authority as governor. This he did, and by so doing provided ammunition for his opponents.

The reaction when the new regulations were announced was predictable.

Colonists aspiring to responsible government/ were acutely conscious of the

imperial government's control over Crown lands, and saw in the regulations a

reminder of the limited legislative power they enjoyed. Graziers, who were

pressing for increased immigration to lower wages and hence costs, were con­

fronted by regulations implying increased costs.

A week after the regulations were published a general meeting "of stock­ holders and others interested in the prosperity of the Colony" was held at

the Royal Hotel in Sydney. The tone of the main speeches delivered was, as

described by Gipps, "no less injudicious than indecent." Seven resolutions were passed, all unanimously: four outlined procedures to be followed and one was a motion expressing the cordial support of the colony's commercial and

trading classes for "the objects of this meeting." The resolutions which

set the tone of the meeting were the first moved by W. C. Wentworth, and the

second by Benjamin Boyd. Wentworth's referred to the alarm created by the new regulations which it went on to describe as: "unconstitutional in their

application and character, oppressive in their influence, and calculated to 267 202 add materially to the existing distresses of the Colony'.' Boyd's 203 objected to yearly leases, and the uncertainty of tenure engendered thereby, which had, his motion stated, "a very demoralising effect on the entire community, and must continue so, until a fixity of tenure is granted to the occupier". The third resolution expressed mercantile support, and the remaining four were:(i) to forward petitions to the Queen, both Houses of Parliament, the Governor and the Legislative Council; (ii) to establish

The Pastoral Association of New South Wales "to secure a due protection to the pastoral interests of this colony}" } (iii) to form a committee "to carry into effect the objects of this meeting}"- and (iv) to send copies of the resolutions it had passed to the various districts of the colony

"inviting co-operation in carrying out the various objects of this meeting^".

Gipps took the proceedings as justification for his action: "the outcry . . . shows how completely the occupiers of these Lands have ac­ customed themselves to look on them as their own: and how urgently some declaration on the part of the government was necessary to check the growth 2 Q/) of /such7opinions. He sent a copy of the resolutions, the Sydney

202 Ibid., p. 856. The notions at the meeting are set out on pp. 856-7.

2fn "The 1842 Land Sales Act (5 & 6 Vic. c. 36. 5.17) permitted only yearly leases so Gipps has no alternative. 204 HRA Series I, Vol. xxiii, p. 545. 268

Morning Herald's report of the meeting and his own comments on the proceedings;to Lord Stanley on April 16, 1844 According to Gipps,, the main aim of the regulations had not been referred to at all during the meeting, so though speakers railed against their despotic nature they never spoke of their underlying principle * "to make persons pay for the use of Crown Lands, in proportion to the advantages they derived from 205 them." , Gipps had sought to deliver the colony from the abuses of the great squatters, but both small and great squatters saw themselves threaten ed It was not only what Gipps had done, but how he had done it which gave credence to the claims Wentworth, Boyd and the other large squatters thundered forth . If changes could be made "at the will and caprice of the executive government, either by alteration in the regulation of the 206 stations, or by increase in the charge for occupations"^ no squatter could be certain of tenure , The fact that William Lee's application to renew 207 his licence had been refused in August^ 1842, still rankled: squatters were still seeking security of tenure and Gipps' announcement showed that it was still far from their grasp.

The general body of squatters therefore saw the occupation regulations

205 Ibid 206 Part of Boyd's resolution 207 Lee had not continuously occupied his station, apparently because he had to move because of drought and aboriginal attacks. As a result of the refusal a petition was presented to the Legislative Councj.1. Roberts drama­ tizes this issue seeing it as the beginning of a battle between Gipps and the squatters. Roberts, cit., p. 217. 269 as a denial of their hoped-for security, as a source of increased costs, and as an abuse of the governor's executive powers. The colony's news­ papers, with one exception^echoed these sentiments: the exception,

Duncan's Weekly Register saw the issue in the same light as Gipps; as a conflict between the governor and land monopolists. "Should a small number of large capitalists monopolize and exclude small capitalists from the whole inhabited area?" it asked in its editorial of April 13, 1844.

The nature of the general response can be seen in three cartoons 208 published and circulated in Sydney in 1844. The first (figure 7)

"Ways and Means for 1845, or Taking it out of the Squatters" shows members of the Executive Council winding a press under which suitably bearded and garbed squatters stoically endure the pressure until it forces them one by one into insolvency. Gipps stands by, commanding the unwilling operators,

"Lay on and be D—--- d to you. I don't want any of your jaw. I've got my owners' orders - that's enough for me and I'll get it out of them before

I sail." The second (figure 8), "Raising the Wind, or Sydney in 1844," shows the Executive Council busily 'boiling down' squatters but with little success. The Colonial Spcretary (Deas Thomson) is shown telling a harsh

Gipps, standing with his hand thrust in Napoleonic fashion into the front of his coat, "There's hardly any tallow Sir, I think it will pay better to let them run and fatten." O'Connell, the officer in charge of the military forces

2Qg Copies are preserved in the Mitchell Library, Sydney. Wa y s a mM de a w s if o r0 © 4 § 270

S o u rc e :M itch ellL ibrary C o llectio n 271 Collection

Library

Mitchell Source: Figure CTN| 272

Source: Mitchell Library Collection 273 in the colony, bemoans his involvement, while the Colonial Treasurer is seated on a bucket labelled 'Treasury', sadly reflecting that it will not be filled in a hurry. Bishop Broughton stands dabbling his hands in a box of 'Gelatine: Compound Concentrated Squatter,' and saying "There's no consistency in this, it won't settle^". Lastly, there is Gipps with a club marked 'Proclamation' grasped in one hand, telling Deas Thomson

"Humbug! Fatten!!! The Devil! Why they'd keep themselves poor out of spite. I suppose you'd let my Debentures run and fatten? ..." The third cartoon (figure 8) lacks the sublety of the others: there is no play on words such as those of Broughton in the second cartoon. It shows

Gipps first as Don Quixote with a lance labelled 'New Regulations' and a shield emblazoned with the Queen's head, charging a herd of bulls labelled

'Fixity of Tenure'. He cries, "In the name of my Illustrious Mistress

. . . whose Knight I am, I charge!" Below Gipps is shown returning to

London, dispirited,and with his lance broken.

In these cartoons and in the various doggerel verses which appeared, particularly in the At las newspaper established in 1844 as an organ of the pastoralists, Gipps was depicted as obstinately refusing to heed the advice of his Executive Council, of whom only Bishop Broughton entertained similar sentiments. His stubborn refusal was shown as an attempt to ingratiate himself with the British government^ simply to ensure further employment once his term of office was expired. In the words of one ditty composed in Sydney:

He has crouched to the Crown as to something divine, Till his fulsome compliance has sullied its shine: 274

Such loyalty might win royal approbation--as it did--but not colonial approval.

Though Gipps could be made the butt of ridicule, this did not alter the occupation regulation. After the first outburst on April 9, 1844, subdued echoes were heard at meetings in various districts where petitions, drawn up with a similar intent to those of the first meeting, were signed by settlers, small squatters, large squatters and merchants. Gipps had aimed at the large squatters but wounded many more who now cried out in protest.

The degree of public opposition seems inordinate and the question arises as to why Gipps did not get the support of "the smaller and medium-sized squatters, those who would lose little or nothing as a result of the occupation regulat- 209 ionsS" ? According to Buckley, "opposition from these lower strata of squatters was partly a reaction to the depressed conditions of the previous few years . . . /for/ when recovery was in sight, an ungrateful government 210 was seeking to place fresh burdens upon him," , But what of the other categories of supporters? Buckley suggests that though in normal circum­ stances

the landed classes of New South Wales were shot through and through with sectional differences and antagonisms .... virtually all landed interests were hostile to one aspect or another of Gipps' land policy: they sank their mutual differences temporarily /in 1844/

Explanations of the amount of opposition aroused by Gipps' regulations have been put £o£wa^<^t^K. Buckley, "Gipps and the Graziers of New South Wales, 1841-6," "*May*, 195^, pp. 396-412 (cited as 1) and May, 1956, pp. 178-93 (cited as 2); B. Dyster, "Support for the Squatters," JRAHS, March, 1965, pp. 41-59; and Burroughs, ££. cit. , pp. 307-12.

210 (2) Buckley, op. cit. , p. 182. 275

in a furious onslaught on every grievance connected with land.

Dyster dismisses Buckley's explanation as "misdirected" and instead suggests:

The protest was not merely a concealed coaltion of variously ag­ grieved rural capitalists, ... It was, rather, ... a movement which recognised a total community of interest, a mutual inter­ dependence (economic, social and constitutional) in which the licensed grazier and his produce was the sine qua non for the integrity of the fabric, and for the prosperity of each of its consitutent parts. Rescue from their present plight depended on the squatters . . .212

This explanation does not contradict Buckley's, as Dyster claims, but simply brings forward a recognition put most succinctly in the third resolution passed at the April 9 meeting: "the commercial and trading classes of the community are most intimately connected with, and dependent upon, the prosperity of the great pastoral interests of the Colony/",

Even this was simply reasserting an opinion widely held and expressed in

New South Wales during the 1830s, but this had not stopped internal divis­ ions then; nor had it stopped accusations being made by pastoralists during the depression of the early forties concerning merchants' perfidy; nor had it then prevented merchants accusing rural interests of irresponsi­ bility. Many blamed the government for the economic distress, but many blamed private interests other than those in which they were involved.

The factor to which both Dyster and Buckley give too little attention is the constitutional - the right of the governor to impose such a regulation.

^^Buckley, ££. cit.,^^ p. 411. 212 Dyster, ££. cit , p. 43. 276

The Rev. J. D„ Lang, who was no friend of squatters or squatting, added his voice to the protest: "viewing the matter as it regarded the liberties of the country generally . . ./he/ published a series of articles on the subject, showing that His Excellency had assumed precisely the same unconstitutional power as that against which the patriot Hampden so nobly 213 protested, To understand the degree of opposition it is not sufficient to set it in its economic context,but also in its political. There were several reasons accounting for the degree of support given to the opposition in the meetings held in various parts of the colony in April and May, 1844: some objected for financial reasons, some for political, while some might even have objected, not for the direct results, but for the indirect im­ plications that the revenue would be used for immigration.

The regulations published on April 2, 1844, referred only to licensing procedures, but in his despatch of April 3, Gipps had written of a proposal to allow squatters purchase "a Homestead/", Since he assumed the 1842 Land

Sales Act would continue, Gipps pointed out that the portion of the station would have to be bought at auction with an upset price of El per acre and 214 that ready money would have to be paid. He recognized that having to buy at an auction would preclude the right of pre-emption desired by squatters

213 Lang, ££. cit., p. 301. Burroughs, (op. cit., pp. 311-2) sees con­ stitutional considerations as reinforcing "this awareness of an identity of interests." 214 HRA Series I, Vol. xxiii, p. 512. 277 but since the Land Sales Act allowed for no other method of purchase he suggested that the value improvements made by the occupier would be allowed 215 him if he were the purchaser, or repaid to him if he were not. Beyond those proposals set by the Land Sales Act, Gipps proposed that any person who had occupied a station for five years "may demand to purchase as a

Homestead any part of his run, not less than 320 acres, "; though in some 216 circumstances the government could refuse the request.

This purchase proposal was not made known till May 13, 1844. Gipps waited till the first wave of protest had died down, then chose a somewhat peculiar way to publicize his "general views on the subject of the occupation of Crown Landis^". He set them out in a paper which he gave to Icely (a nominee member of the Legislative Council) with permission to make them public. It was published in the Sydney Morning Herald on May 13, 1844, and received some favourable comment, but "the great Squatters are, however, 217 by no means pacified^"^Gipps reported on May 17, 1844. The Pastoral

Association published its protest in the Herald on May 16.

Gipps' paper set out the occupation regulations of April 2, clarifying a point not made in the original statement, viz.}that a squatter having more

The upset price set was to take into account the value of improvements as established by a committee representing the occupier and the government. 216 Ibid

Ibid., p. 602 278 than 4,000 sheep on a station would not pay the full cost of an additional licence but tl for every 1,000 sheep over 4,000. The paper also outlined the occupation proposals Gipps had sketched in his despatch of April 3, but added that "any person, who may have purchased a Homestead, shall not be disturbed in the possession of his Run during the following eight yearsx"^ while each successive purchase of 320 acres "will act virtually as a renewal 218 of an 8 years' Leasex" . This gave squatters some security of tenure but subject to the purchase of 320 acres for at least tl per acre each eight years: security was going to cost at least t40 per year.

The Pastoral Association's objections reiterated arguments voiced in the colony during the past few years: the upset price of tl per acre was un­ reasonable; the Crown retained absolute control over unsold lands and there­ by "retains to itself the power of taxing the people without the consent of their Representatives to an unlimited extent"; there was no right of pre­ emption; there was no fixity of tenure. It also repeated the argument advanced in the report of the 1843 Select Committee on Lord Stanley's Land

Act: that the export of capital raised in the colony by the sale of land to finance immigration "is an operation which must be injurious to the Colony";

"the investment of large sums in the purchase of Land would tend to produce 219 another commercial crisis\"» The new arguments advanced in it were that

218Ibid., p 604. 219 Ibid., pp. 605-6. This clause continued, claiming that since 'it is equally expedient to the payer of poor rates at home to send as for us to receive /migrants^ a large portion of the passage money ought consequently to be paid by the parishes." 279 the system was akin to "Leases renewable at stated periods on payment of fines, a system universally exploded", and that the revenue which would be derived during the first five years under the proposed regulations (a total of L845,000, it estimated) exceeded the present value of livestock depastured in squatting areas. It ended dramatically, pathetically referring to im­ pending ruin but reminding colonists: "no amount of mis-government has ever been able to bear down a British community if true to itself/".

Gipps duly forwarded a copy to Lord Stanley appending sardonic comments.

Concerning some of the protest's clauses he simply pointed out how the Land

Sales Act had determined the form of his regulations; he simply rebutted the assertions that his proposals gave no fixity of tenure; concerning the claim that land revenue should not be used for financing immigration, he commented

"it doubtless would be better if we could get Emigrants for nothing, than to it be obliged to pay them"; and as to the estimate of land revenue, 1m simply reflected the greed of the large squatters and indicated the extent to which 220 they would misrepresent the situation for their own ends.

The Legislative Council began its 1844 session in May. The petitions drawn up during the preceding six weeks were presented and the council ap­ pointed a Select Committee on Crown Land Grievances. It heard evidence from the Surveyor-General; persons with large squatting interests such as

Benjamin Boyd; members of the mercantile community such as Frances Kemble; persons long established in the colony such as James Macarthur; and sought

220 Ibid., pp. 606-7 for Gipps' comments on the protest. 280 information from squatters in various districts by means of a circular letter. With but one or two exceptions all condemned the high upset price of land; all condemned the uncertainty of tenure in squatting districts; and all saw sheep-raising as the basis of the colony's pros­ perity. All seven members of the select committee were members of the

Pastoral Association, so witnesses were carefully selected and the evidence presented culled to ensure that the report faithfully reflected the views of its progenitors. The report was completed by September/ 1844, and the chairman gave Gipps notice of his intention to move certain resolutions when it was presented to the council, including one condemning the occup­ ation regulations ^s^"impracticable in principle, and oppressive in detail"^ and calling for their recall; and one condemning the purchase regulations as "founded on principles which cannot be worked out without the utter ruin 221 of the grazing interests," ,

Gipps brought the committee's report before the Executive Council on

September 16, 1844, to ascertain whether its recommendations might lead the council members to modify the opinions they had held when they advised the issuing of the occupation regulations. At its meeting on September 30,

Bishop Broughton and Gipps each presented lengthy papers defending the

222 analyse. regulations. Broughton took the opportunity to /critically

221 Ibid., p. 830 222 Ibid . , pp. 831-44. 281 proceedings and report of the Crown Land Grievances committee, and used evidence given to the committee to demonstrate how its findings represented

"the repetition of a condemnation which had been already determined on and pronounced *" ,

The report had condemned the increase in the upset price as the cause of the cessation of land sales and hence of immigration: Broughton showed that there was nothing to prove that land sales would not have ceased even if the price ahd been maintained at five shillings; in fact, evidence suggested that the lower price had led many immigrants to use up their capital in purchasing land leaving themselves no working capital, and news of their difficulties had retarded further immigration of capitalists.

Evidence collected by the select committee also showed that the regulations then in operation were widely regarded as having "a most injurious effect upon the moral and social condition" in squatting areas, yet the committee had advocated recalling Gipps' regulations which were designed to obviate these defects. Beyond denouncing the regulations, the committee had offered no specific alternative except to pronounce:

when the /Legislative/ Council shall have been invested with the necessary powers, it will be its first duty to frame such a System of leases as, without really surrendering under that name the right of the freehold, may yet give the occupier that Security which is so necessary in every point of view; and to annex to those leases such rights of pre-emption and of compensation for improvements as may render it for the interest as well as the comfort of the Stock22^ holder to Surround himself with the conveniences of Civilized life.

223 Ibid., p 836 282

But these principles did not secure the rights of the Crown, Broughton

pointed out, and these rights were designed to protect the interests of

the whole community: the report's principles offered advantages to just

one class. Lastly, the committee's claim that Gipps' regulations raised vre- a revenue without the consent of the legislative brought forward the question

of the rights of the Crown: to deny them meant that all alienated land in

New South Wales had a defective title Broughton claimed.

Gipps had little to add to Broughton's argument. His paper emphasized

how the 1842 Land Sales Act shaped the regulations he proposed and then dealt

with questions such as pre-emption and whether an assessment should be levied

on livestock depastured on Homestead land, before discussing whether the

cost of the licence fee could be reduced. In answering this he once more

stated his conviction that it was reasonable and proper to raise funds for

immigration from squatting lands. The demand for labour was at the time

'satisfiedK,fbut it would be the squatters who "first raise an outcry as

soon as they find the price of labour to be increasing/".

The Crown Land Grievance committee's report did not move the Executive

Council to alter its stand. Gipps and Broughton considered its assertions

to be without foundation and regarded many of its structures to be frivolous: claims "such as could have been employed only under the influence of feelings

by which the fair exercise of judgement was superseded ", But the squatters'

protestations were not to be easily dismissed. It might not be possible

to make Gipps change;but pressure could be brought to bear in London, so in 283

September^ 1844, Francis Scott was appointed as parliamentary agent in 224 London for the Legislative Council, i.e. , for the squatting interest.

In Sydney Duncan's Weekly Register predicted that no government could withstand for long a powerful body such as the squatters and called upon 225 colonists to form a "defensive body"^but with no success. Meantime the newly established squatters' mouthpiece the Atlas began to shower invective on Gipps and call for his recall. Few came to his support and though schisms began to appear in the Pastoral Association, in 1845 colonial public apathy allowed the squatters command the field.

Gipps was undoubtedly disheartened by the lack of support from those whose rights he sought to protect, but he would have been heartened by

Stanley's despatches of January 29 and 30, 1845. The first dealt with the report of the Legislative Council committee which had examined the Land

Sales Act (5 & 6 Vic. c. 36) in 1843; the second with Gipps' regulations.

In the former Stanley repudiated the committee's claim attributing the decline in land sales to the increased price, instead suggesting it was the result of speculative purchases of land, and then proceeded to endorse -for i« Gipps' suggestion that rovonw-e /should be raised from squatting districts^ far immigration in the belief that the colony's future progress was dependent

^^See Roberts, op. cit. , pp. 251-2. 225 Weekly Register, November 9, 1844, February 15, 1845. 284 upon it. The second despatch praised Gipps: "I approve, therefore, highly of that sense of public duty which has led you to incur the odium 227 you have brought on yourself by issuing the regulations in question,/' ,

Stanley wrote. The conflict between Gipps and the squatters he saw centring round two issues: "the right of the Crown to sanction any Regulations at all of the character which you have pronulgated . . ./and/ the reasonableness 228 and propriety of the regulations themselves. He animadverted the argu­ ments put forward at the Royal Hotel meeting and upheld the regulations as being both within the rights of the Crown and reasonable. This being so? he had unhesitatingly submitted Gipps' regulations for royal approval, which had been granted.

The occupation regulations came into force in the middle of 1845,* shortly afterwards Gipps received a despatch from Stanley stating that his replacement had been chosen and that he could return to England knowing he had the confidence of Her Majesty's Government. It might almost appear that

Gipps had won; that he could take the rest from his labours which his ill- health required. But his successor, Sir Charles Augustus FitzRoy, scion

226 HRA Series I, Vol. xxiv, pp. 205-8. Stanley enclosed in this despatch a report from the Land and Emigration Commissioners which commended Gipps' "powerful reasoning." The Commissioners were extremely critical of the report and pointed to the inconsistency between its claim that none of the land fund should be used for immigration and the situation a few years previously when the Legislative Council were demanding that the whole land fund was to be devoted to this purpose 227 Ibid., p . 218. 228 , . , Ibid., p . 219. 285 of the ducal house of Grafton, did not hurry off to the antipodes so it was July/ 1846, before Gipps quitted Sydney, broken in health and spirit.

The epilogue excludes pathos: during the last year of his administration

Gipps learned of the squatters' triumph in London; was insulted by the

Legislative Council'7and departed^hounded to the last by Sydney's newspapers.

The squatters had failed to have the regulations withdrawn in Sydney so they organized in London. By 1845 thirty per cent of the wool imported into Great Britain came from Australia and the percentage was growing^so the squatters' suggestion that the system of land occupation in New South

Wales affected not only them but also British merchants and manufacturers obtained a ready audience. An association in Glasgow for the promotion of squatting petitioned Lord Stanley for long leases for squatters and the 229 removal of legislation squatters considered odious. On May 23, 1845,

"a large Meeting of Gentlemen, interested in and connected with the trade of the Colony /was7 held in the City of London" and resulted in a petition expressing alarm at Gipps' regulations. "Our Wool Trade and Woollen manufacturers are mainly dependent upon the prosperity of the Colony of

Australiaj"; as long as suitable legislation were forthcoming Britain could be made "in great measure independent of the Foreign Market for a supply of Wool" - an argument used to great effect by John Macarthur forty years before. Twenty-one year leases for squatters would "promote the mutual Interests of the Crown and the tenant, lead to the more permanent

229 Ibid., pp. 571-3. 286 prosperity of the Colony, and give a great and lasting impulse to the 230 Woollen Manufactures of this Country." , Gipps was advocating the protection of the rights of colonists and their descendants: the squatters were seeking to ensure the prosperity of an important British industry, so it was made appear.

Stanley received the petition and listened to the attendant deputation.

He learned that many squatters opposed Gipps' regulation because of their inability to buy the prescribed number of acres. To overcome this objection

Stanley decided to provide leases for pastoral purposes for twenty-one years purchaseable at auction. This procedure he thought compatible with the provisions of the 1842 Land Sales Act, but the squatters' spokesmen demurred, claiming that squatters who had made improvements on their stations would be exposed to the risks of the auction room; they could be outbid by 231 speculators. Stanley would not surrender to the claim for twenty-one year leases grantable to occupiers^so compromised^ and offered seven year leases.

This was incorporated in a bill introduced into parliament by Hope, the Under-Secretary for Colonies, during its 1845 session. Its basic principles, according to Stanley, were to retain the principle of the 1842

Land Sales Act; to make unsold Crown Lands productive; and to give security of tenure to occupiers of unsold lands on easier terms than were possible

230 Ibid., p. 573. 231 Ibid., p. 438. 287 under the existing Act. In 1843 Gipps had asked Stanley for legislation on the squatting question, now he received the draft of a bill incorporating

the antithesis of all he had sought to uphold. Stanley might try to soften the blow by stating that the bill "empowers the Local Authorities to add to the modes in which the occupation of Crown Lands can now be permitted, 233 leaving to them a discretion in the adoption of those modes*"^ but Gipps discerned the triumph of squatterdom. He defended the principles under­

lying his regulations in a despatch written on January 10, 1846, but seeing

the inevitable^he conceded that leases would have to be granted, preferably

seven-year leases.

By the time Gipps' despatch reached London, Lord Stanley had been re­ placed at the Colonial Office by Gladstone, who was in turn replaced by

Earl Grey in July^/ 1846. Hope's bill had not been passed in 1845, so the squatters' spokesman in London continued to assail the Colonial Office with appeals and advice. The departure of Stanley and the later accession of

Grey raised hopes for additional gains for the squatters and they were finally and fully realised in the passing in August/ 1846, of "An Act to amend an Act for regulating the sale of Waste Land belonging to the Crown

in the Australia Colonies . . ." (9 & 10 Vic. c. 54).

By this time Gipps had left the colony. The failure of the 1845 bill h** meant Gipps had 'to ask the Legislative Council to renew the local squatting

legislation for one year to give the Crown some means of control outside the

Ibid., p. 437. 233 Ibid., p. 440. 288

limits of location. Gipps called the Council together in Mayy 1846, and made his request which was refused. To rub salt into the wounds,

the Council sent a vitriolic address setting forth reasons for its decision.

Basically, the Council challenged the rights of the governor to impose

"a tax without prerogative", and to promulgate regulations without consulting

it and to adhere to them despite its "earnest remonstrances/'. Gipps received the deputation bearing the address, and}in a short, terse statement^- declined to offer a written reply. The Council^being offended^decided in

spite to adjourn till after Gipps had left New South Wales to avoid further 234 dealings with him; Gipps saved it the trouble, by proroguing it. This was the final exchange between Gipps and the squatters: Gipps had slapped

some naughty boys who knew they would shortly get their own way.

The Australian Lands Act of August^ 1846, gave the squatters long leases.

Grey explained its underlying principles in his despatch of November 29, 235 1846, where he argued that since the upset price of twenty shillings should be retained, some provision for "the temporary occupation of land for pasturage on much easier terms than those upon which its permanent alienation is

permitted" was necessary. Yearly leases precluded improvements: leases

for longer periods would promote the interest "both of the public and of the

individual occupiers of wild lands/'. Improvements, particularly "those

234 See Roberts, 0£. cit., pp. 257-9.

HRA Series I, Vol. xxv, pp. 271-8. 289 having for their object to secure a larger and more permanent supply of water" would enable the number of sheep carried on a given area to be increased ,and this would check "at least in some degree the present tendency of those engaged in pastoral pursuits to scatter themselves over an enormous extent of country". This was a fine sentiment and to a Wakefield adherent theoretically correct, but Grey had obviously not considered the evidence which showed the varying densities of the sheep population within particular districts, not had he heeded Gipps' remarks on land monopolization by large squatters. Gipps had tried to prise land out the hands of those who occupied large areas without fully exploiting them: Grey now gave them the land to hold .

Details of the transfer of the land to the squatters had still to be worked out, so Grey sought information from colonial livestock owners resident 2 36 in Britain and waited till Gipps' return to seek his advice before issuing detailed instructions concerning "the occupation of land, for pastoral pur­ poses, in New South Wales*", This was done by an Order-in-Council dated

March 9, 1847, which provided for the division of lands into New South Wales into three classes: (1) settled districts, comprising of the counties pro­ claimed before January 1, 1838, the counties of Macquarie and Stanley (see figure 6), land within twenty-five miles of Melbourne, land adjacent to

In a letter accompanying the Order, Grey wrote: "the arrangement as a whole had obtained the approbation of Sir George Gipps, than whom no one had on this subject more accurate and extensive knowledge, or a sounder judgement.".' Votes and Proceedings . . .: 1847, p. 283. 290 certain towns, all land within three miles of the sea, and land two miles on either side of the Clarence, Richmond and Glenelg Rivers for certain designated parts; (2) intermediate districts, comprising of three parts of Bourke, Grant and Normanby counties in the Port Phillip district,

Gippsland, and counties formed before December 31, 1848, not included in settled districts; (3) unsettled lands, being all lands in the colony which were not classified as settled or intermediate. In unsettled districts, leases for pastoral purposes could be granted by the governor to persons he considered fit, for a period not exceeding fourteen years, with the provision that the leasee could cultivate sufficient land for the subsistence production of grain etc. In intermediate districts, leases could be granted for eight years with annual renewals thereafter, and in settled districts annual leases were available.

Persons who had occupied a run for twelve months could demand a lease within six months of the promulgation of the Order in New South Wales. The rent payable was to be set by the carrying capacity of the run twhich was to be capable of carrying at least four thousand sheep or a cattle equivalent given by a scale to be established by the governor. The minimum rent for a run was to be tlO per year and an additional E2 10s. was to be paid for each additional thousand sheep above four thousand which it was adjudged

237 The towns named were Geelong, Portland, Albertoh, Eden, Bathurst, Macquarie, Ipswich, Wellington and a town on the River Clarence. 291 that the run was capable of carrying. Rent was payable yearly in advance and an occupier could be dispossessed if the rent was not paid within sixty days of its falling due. The Order further provided that an occupier could purchase part of his run at a price of at least LI per acre, the minimum purchase allowable being 160 acres, with a further proviso that for purchases 2 38 of less than 320 acres the occupier had to meet the cost of the survey.

The Order gave the squatters the security of tenure and the right of pre-emption they had sought. They now had control over the land they had grabbed and for it they were to pay considerably less than Gipps' regulations had provided. Those regulations had been accorded a general, hostile reception and had provoked a demand for the conditions which the Order now gave; logically it should have been received with general acclamation. But the detested upset price of LI per acre remained; combining it with the new squatting regulations meant as Robert Lowe observed: "Be the capabilities 239 of these lands what they may they are to be a sheep walk for ever/' • It was too late however to redress the situation, Lowe had been to the forefront of the opposition to Gipps^to which J. D. Lang had also contributed^but he also bitterly denounced the new situation. The Order embodied all m£ the concessions the squatters had demanded; Lang wrote, "to the unspeakable in-

2 38 The Order-in-Council is set out in Clark, ££. cit., pp. 252-6. 239 S. Sidney, The Three Colonies of Australia, (London, 1853), p 188 quoting Lowe, Address to the Colonists of New South Wales on the Proposed Land Orders. 292

jury of all future emigrants from the Mother Country, as well as of the

great majority of the actual colonists". The rapid settlement of the

colony "cannot possibly be the interest of the squatters; as it tends

to dispossess them of their Stations, and to abridge their Runs". The

squatters had been allowed to determine the form of legislation for all the

colony, a confrontation between the squatters and the rest of the colonists 240 had become inevitable at some future time. "Earl Grey and those who had

departed from Gipps had saddled Australia with an incubus that could not be 241 shaken off, a problem that could not be shaken off".

While some colonists bitterly denounced the boon given to squatters,

the squatters found that it had flaws, as the 1849 Select Committee on Crown

Lands indicated:

Whether wisely or not conceded, your Committee frankly admit that the squatters are entitled to the benefits designed for them by the Parliament and the Privy Council. There is however among the squatters themselves an increasing feeling of dissatisfaction, and grave doubts are expressed whether these concessions, with all their concomitants, are not likely to be more injurious than beneficial to the class for whose advantage they were extended.242

The squatters had leases at a fixed fee, the right to compensation for improve­ ments, and a pre-emptive right at LI per acre, but the lease included no accurate description of the land. That could only be obtained by a survey

^^Lang, 0£. cit. , Vol. I, pp. 303-4. 241 Roberts, o£. cit., p. 271. See also Burroughs, ojd. cit. , pp. 324-330. 242 "Report from the Select Committee on Crown Lands", p. 10, Votes and Proceedings . . .: 1849. 293 which squatters, "as a class impoverished and embarrassed by high wages and low prof it s,.'^ could not afford. Neither could the land be commercially cultivated^nor could it be sub-let, while "grave legal doubts are entertained whether it can be mortgaged, assigned, or devised^". Tenure may have been precarious under the former system, but leases lessened the uses to which land could be putjand diminished the security against intruders. Lastly, the report added, the minimum si^e of a run allowable under the Order aggravated:

the difficulty already great ... by limiting the number of purchasers. There is a tendency towards the subdivision of large flocks and herds, arising from high wages, which render the labouring class willing to buy, and from low profits which render the proprietor willing to sell; but f^i^ this market, . . . the squatter is excluded by these regulat­ ions .

Perhaps the squatters had won a Pyrrhic victory but they had triumphed: they controlled the land and New South Wales was cast in a pastoral mould.

Labour was also required for the production of wool. The 1849 report criticized the land occupation system and equally the system of immigration associated with it.

No attempt has been hitherto made to supply the Colony with a con­ tinuous stream of immigration; we have a succession of floods, each succeeded by its corresponding drought. The resumption of immigrat­ ion is a cause of panic to the laboring classes; its discontinuance, to the employers of labor. As the tendency in the Colonial labor market, is invariably in favor of the laborer, the cessation of im­ migration is attended with the most disastrous results to the employer of labor; it is not merely that his laborers raise their demands, but hsi power over them is seriously diminished ^44

243 , , ,, Ibid., p. 11. 244 Ibid., p. 12. 294

Thus the deluge of 1838-42 gave way to the drought of 1843; a minor flood of 1844 to the drought of 1845-7; and it to the flood of 1848-50 (see figure 6). When land revenue was available immigration was begun, when its costs exceeded the available revenue a debt was contracted, then immigration was stopped till the debt was repaid. Only in 1842 was there any sign of an abatement in pastoralists' complaints about labour shortages and wage increases. Thereafter there was a lasting lament: either because there were no immigrants arriving, or because those arriving were unsuitable.

The chorus ran: "What the Colony requires ... is pastoral and agricultural

/labour/"; using funds to import any other kind of labour" deprives us of 245 that which is necessary in order to deluge us which is worse than superfluous".

So reported the committee in 1849, a year when nearly sixteen thousand assisted immigrants arrived in New South Wales, many of whom simply paused before 246 proceeding to the Californian gold-fields, many of whom simply replaced colonial labourers who had previously been lured away by American gold. Even when in the last years of the 1840s there was a flood of immigrants, there was a dearth of labour as far as pastoralists were concerned.

The resumption of assisted immigration in August^ 1843, brought 4,139 247 migrants in 1844 and 498 in 1845 but a lack of fiends had brought it to an end.

245 ... Ibid., p. 13 246 Ibid. 247 In December, 1844, the Legislative Council claimed that L793,000 from the colonial revenue spent during the previous ten years on police and gaols should have been paid by the British government, and off.ered to accept immigrants to this amount. (HRA Series I, Vol. xxiv, p. 148.]) The offer was not accepted. 9 205

In August/ 1845, the Legislative Council appointed a Select Committee on

Immigration which found that 12,500 immigrants each year during the following three years were needed; four thousand men to care for the annual increase in the colony's flocks and herds, an equal number of women and a due proportion of children. To finance this flow the committee advocated raising a loan of L500,000 in England at four per cent and cited a recent loan to Canada to justify their request for a guarantee by the British government. Such a loan, which would enable forty thousand immigrants to be brought over a three year period/^ would cost L40,000 per annum (L20,000 for interest and

E20,000 to be paid into a sinking fund for the loan's redemption)/) and, if raised in England, would avoid having to send large sums out of the colony

- the previous capital export for immigration being blamed for much of the colony's economic difficulties. 248 The British government refused to guarantee the loan, and such land revenue as was raised went towards paying off the E100,000 worth of debentures issued in 1844 to meet the cost of immigration.»« fc/o assisted immigrants arrived during 1846-7. By September, 1847, the immigration committee for that year had to report:

at no period since the foundation of the Colony has there been so great, so urgent, and so pressing a demand for labor as at the present moment - of that species of labor with which the most important interestj^^f the Colony are involved - namely of shepherds and farm servants.

248 "Report from the Select Committee on Immigration", p. 5, Votes and Proceedings . . .: 1847 249 Ibid., p. 2 296

Since it was expected that the debentures previously issued would be paid off before the end of 1847 the committee proposed issuing more to enable immigrat­ ion to be restarted, and also suggested that parishes in Britain might pay part of the expenses for emigration was beneficial to both the colony and the Mother Country. Fitzroy Reported in December^ 1847, that the debentures had been paid off, and forwarded a petition signed by 943 "influential and 250 responsible" persons calling for a resumption of immigration. Meantime

Grey had received similar petitions and just four days after Fitzroy sent this particular request, forwarded a despatch informing Fitz^py that the assisted emigration scheme was to be restored and instructing him to raise 251 E100,000, this once more opened the flood-gates.

There were constant complaints from 1843 onwards concerning the shortage of labour, yet Earl Grey's attempt to resume the transportation of convicts to New South Wales late in the 1840s proved unsuccessful, even though it 252 received support from many influential squatters. The desirability of ending convict transportation had been questioned by the Legislative Council in Julyy 1838, at the time the question was under examination in Britain.

Then the Council had resolved inter alia: "That . . . the sudden discontin­ uance of Transportation and Assignment, by depriving the Colonists of Convict labour, must necessarily curtail their means of purchasing Crown lands, and

250 HRA Series I, Vol. xxvi, pp. 70*-/. 2~^Ibid . , pp. 104r*^. 252 Lang, ££. cit., p. 356, points out: "A considerable portion of the squatting interest . . . were in favour of the resumption of transportation; and they had a small but influential party, headed by Mr. Wentworth, in the Legislative Council^. 297

253 consequently the supply of funds for the purposes of Immigration". The

Council was not stating anything novel however: the Report of the Select

Committee on Transportation recognized that cutting off the supply of convicts to New South Wales would have serious immediate repercussions, as would the alternative - continuing its dependence of convict labour. The pastoral industry required ten thousand labourers in 1837, but only three thousand convicts could be sent in that year, so * as the report stated:

"nothing . . . can be better demonstrated than that labour must be supplied from other sources than that of Transportation, if New South Wales and Van

Diemen's Land are to continue to flourish". But transportation and emi­ gration were incompatible, the report held: the former counteracted the moral benefits of the latter; emigration deprived transportation of its terrors. Furthermore, convict transportation could discourage emigrants from continuing to work as labourers,while the low price of five shillings per acre facilitated acquisition of land, so transportation might increase the supply of labour but also the demand. Such considerations formed part

anti of the reasons behind the decision to end convict assignment « LbiibT trans­ portation to New South Wales.

Support for the cessation of transportation was widespread but not uni­ versal in the colony at the time the decisions were made known. A public

253 Clark, o£. cit., p. 156. 298 meeting held in Sydney in February^ 1839, produced a petition to the Queen and parliament praying for a deferment in the final decision for twelve 254 months to allow evidence to be collected in the colony, but there was just as much evident support for the British government's decisions be­ cause of the moral and social benefits they implied, kittle importance was initially attached to the economic implications for it was believed that free immigration would supply the colony's labour requirements. By the early 1840s colonists had begun to regret the withdrawal of convict labour * a measure for which they had petitioned. The arguments about the inherent moral taint of conviction were forgotten as labour became in­ creasingly scarce and dear, as was the former contention that free labour was ultimately cheaper than convict labour^ so there was talk of seeking the 255 resumption of transportation. After 1842 there was however a large number of recently-arrived free immigrants in the colonyjWho^, finding it difficult to obtain employment^ were generally opposed to the introduction of more free immigrants. They might not have been concerned when the squatters were seeking to monopolize the land: they became so when their immediate welfare was threatened^particularly by talk of resuming convict transportation.

254 "Appendix to the Report from the Select Committee on the Renewal of Transportation", Votes and Proceedings . . .: 1846. There was some doubt as to whether the petition was signed by 1,400 or 4,400 persons. 255 See Monro's comments on the colony in 1842. Mss - Mitchell Library. Monro pointed out that though Port Phillip residents prided themselves on its not being a convict settlement, and claimed that there was "a superior tone of morality and manners", this was not the case. Settlers there had to be just as dishonest as their Sydney counterparts when it came to exploiting newcomers by selling them sheep: "neither suppresso verdi nor suggested falsi is des­ pised, but I will leave it to yourself to imagine the ungentlemanly bargaining and sharping which this must necessarily lead to and the effect which it must necessarily produce on the moral pulse of the community". 299

The first shot in what wgie. t© later became a battle in New South Wales over the resumption of convict transportation, was the letter, written on

April 30, 1846, by Gladstone. There had been changes made in the convict system shortly before this: one made late in 1845 allowed ticket-of-leave holders from Van Diemen's Land take employment in southern New South Wales; and an Order*in-Council passed on February 17, 1846, allowed the formation 25 of a convict settlement in New South Wales north of the twenty-sixth parallel.

These changes had posed a problem for inhabitants of the old part of the colony: the letter of April 30 constituted a real threat. In it Gladstone observed that the supply of free labour in New South Wales was inadequate and suggested that convict transportation might be "a measure favourable to the material fortunes" of the colony, not by providing labour for pastoral pursuits as previously, but by providing convicts for the "execution of public works generally" which the shortage of free labour did not permit.

Convicts would not be sent however, unless the Legislative Council showed

"a disposition to concur in the opinion that a modified and carefully regulated introduction of Convict labourers into New South Wales, or into some part of 257 it, may, under the present circumstances, be advisable".

FitzRoy laid the letter before the Legislative Council which appointed a Select Committee ^chaired by W. C. Wentworth^"to inquire into and report on

256 J. M. Ward, Empire in the Antipodes, (London, 1966), pp. 40-1. 257 Gladstone's letter forms Appendix A to "The Report from the Select Committee on the Renewal of Transportation", Votes and Proceedings . . .: 1846 300

the dispatch of the Secretary of State for the Colonies . . . respecting

the renewal of Transportation". It completed its report^which favoured

renewaljOn October 31, 1846, but there was a division of opinion in the

colony,as shown by the public meeting held in Sydney on October 22, 1846# It whrefe had resolved:

That this Meeting had heard with the deepest feeling of alarm and regret that it was proposed to renew the system of Transportation to this Colony, and they could not concieve any circumstances under which such a measure would be desirable or justifiable?^

The ^'Committee' s report did not blatantly argue the need for pastoral

labour but quietly suggested that convicts should be assigned "in the

first instance to . . . /employers in/ the nineteen counties, in which

pastoral pursuits are most generally followed, and to the squatting districts 259 beyond the limits of location1.'. This had not been Gladstone's intention; he had suggested using convicts for the construction of roads and other

such public works so the committee had to justify its alternate proposal.

This it did by pointing to the disadvantages of employing convicts in gangs:

"as, in the physical world, it is an invariable law that all agglomerations

of animal or vegetable matter heat and putrefy and decay; so, in the moral world, there can be no aggregations of human beings . . . without calling 260 this putrescent agency into existence". Dispersing convicts would therefore

2 58 Jx^sfir. Lang, ojd. cit. , Vol. I, p. 358 The meeting was chaired by Charles Cowper and was the first of a number of Anti-Transportation Meetings held in Sydney before transportation to the eastern Australian colonies was finally abandoned in 1852. 259, 'Report on the Renewal of Transportation", p. 5. Votes Proceed, 260 Ibid., p. 2 301 be the only way of really ensuring their reformation - a rather dissimilar argument to the evidence concerning 'squatters' given to the 1835 committee on police and gaols - and employment on sheep runs would ensure dispersion

This turned Gladstone's proposal into a form more amenable to squatters' immediate needs, but the committee had also to disarm local opposition to

the idea of resuming transportation.

The committee noted "the general distrust and alarm which pervade the operative classes at the prospect of renewed transportation" but considered

such fears groundless, based on a failure to recognize that the employment of convicts in the interior would have favourable effects on all branches of 261 industry, both urban and rural. Moreover, the committee pointed out, it was not a question as to whether transportation was to be resumed, nor whether convict labour was to be kept our of the colony. The 1845 change in convict regulations permitted ticket-of-leave holders from Van Diemen's Land into the colony while the penal settlement Gladstone planned on establishing to the north would eventually mean that ex-convicts would pour into the main settle­ ment, so in effect transportation existed but in an "indirect and polluted

shape". According to the committee, the Secretary of State's letter

amounts to an unequivocal declaration, not only that convicts will be sent to any part of the Colony which may be disposed to receive them, but that they will also be sent, whether the Colony or any portion of it incline to their reception or not, if the concurrence

261Ibid., p. 8. 302

of your Honorable House can be obtained.

Since therefore there was already a polluted form of transportation, the committee deemed transportation "in a direct form on equitable conditions" desirable, and therefore suggested that; (i) at least five thousand convicts should be sent to New South Wales each year; (ii) two-thirds of the cost of police and gaols be met by the British Treasury; and (iii) an equal 262 number of convicts and free immigrants should be sent each year.

FitzRoy forwarded the committee's report to Earl Grey, who had replaced

Gladstone in July^ 1846, with a despatch discounting the degree and signifi­ cance of local opposition to the resumption of transportation. Grey used the report to draw up a modified system of transportation, details of which he forwarded to FitzRoy in September^- 1847, for consideration by the local legislature. Less than two weeks after Grey had sent this despatch, the

Legislative Council, at the behest of Charles Cowper, repudiated the re­ commendations of the 1846 committee so it looked as if the question of send­ ing convicts had been settled, yet when Grey's scheme of "combined deportat­ ion and emigration" was presented to the Council in April/ 1848, it was accepted^ with slight amendments, because of the pressing shortage of labour

Lang, ££. cit., Vol. I, pp. 356-7, claimed that the squatter supporters of convict transportation consisted of three groups: (i) adventurers, mainly bachelors, seeking to make a fortune in the colony and not intending to remain there; (ii) squatters with "aristocratic notions and feelings, who disliked the advances that were evidently making by the middle and industrious classes of the free emigrant class"; and (iii) "old hands", who had developed a liking for the arbitary power convict employers once enjoyed. 303

in New South Wales. It involved importing convicts, but it also

provided for an equal number of free emigrants to be sent at the British

government's expense^and since the latter depended on the former the

Council felt bound to accept the proposal.

News of the Council’s acquiesence was received by Grey in August^

1848, but the parliamentary session was then too far advanced for him to

have the funds necessary for the emigration part of the scheme voted, and in

any case current financial stringencies precluded Grey's asking for such

funds. At this point parties in London interested in New South Wales

pressured^Grey, referring to the dire need of labour in the colony and

264 suggesting that this would make colonists accept only convicts. Grey

therefore had the 1840 order-in-council ending transportation to New South

Wales/ revoked in September/ 1848, and informed FitzRoy of this move and of

the fact that arrangements were being made to send a shipload of convicts,

,,265 adding, if "the Colonists object to receiving Convicts, no more will be sent"?

This intention became known in the colony early in 1849; two large well-

attended public meetings were held in Sydney in February-March, 1849, at

which petitions against the resumption of transportation were adopted, and

263 A petition sent in 1848 by 452 "Bankers, Merchants, Agriculturists, Stockholders, and others, Employers of labour in New South Wales" stated that if supplies of labour did not become available, livestock would have to be boiled down for tallow and many colonists would face ruin. (HRA Series I, Vol. xxvi, pp 563-4).

^^Ward, ojd . cit , p 43.

2^~*HRA Series I, Vol. xxvi, pp. 587-90. 30 4 meetings at other towns followed at which similar petitions were adopted.

Meantime the Hasl>emy with its cargo of 212 convicts had been detained

in England due to an outbreak of cholera, so it was Juney 1849^ before

it arrived. Its appearance led to a public meeting attended by four to

five thousand persons; chaired by Robert Campbell, a prominent Sydney merchant; and addressed by Robert Lowe and Charles Cowper, among others. The meeting resolved that the convicts should be sent back to England and

appointed a deputation to convey to the governor its sentiments. The

convicts were however disembarked and taken by eager employers while the

deputation was most discourteously received by FitzRoy, which action led to

a second public meeting which condemned FitzRoy and called for Grey's

dismissal. Thai "the Legislative Council, in more subdued tones, condemned

Grey's proposals and asked for the repeal of the 1848 order-in-council.

Agitation against transportation continued into 1850; then in

August/ 1850, a copy of a FitzRoy despatch describing the Juney 1849, meetings was accidentally discovered among parliamentary papers in the

Sydney public library. In it FitzRoy had called the persons who then

assembled a mob ,and claimed that only a few hundred had been in attendance.

This palpable misrepresentation aroused antagonismstand a public meeting

was held in Sydney on September 16, 1850, when Earl Grey's dismissal was

demanded, and an Association for Preventing the Revival of Transportation

formed.

Meanwhile the Legislative Council which had made no clear statement

had been bombarded with petitions, some favouring the resumption of trans­

portation bearing 525 signatures, some opposing it .7ith 36,589 "signatures 266 of persons of all classes, grades and professions throughout the colony".

2^Lang, ££. cit. , Vol. I, p. 361. 305

The Legislative Council, which had been adjourned at the instigation of b members favouring transportation to allow colonists to give a clear expression

of their feelings on this matter, now had a very clear indication^so at the

end of September/' 1850, resolved to request the revocation of the 1848 order

declaring New South Wales a place to which convicts could be transported.

This resolution, the discovery of gold in May^ 1851, and Grey's fall from

office}combined to produce the decision to end convict transportation to

the eastern Australian colonies in 1852.

Earl Grey and the squatting interests had failed to ensure a supply of

convict shepherds but there was imperial legislation guaranteeing squatters

tenure of land^ and local legislation giving wool-growers the right to pledge

their wool-clip or their livestock as security for loans, and to ease their

lot if they had to file an insolvency schedule. As one historian has lacon­

ically stated: "in the general legislation of the Australian colonies the 267 pressing needs of pastoral communities may be read largely". This was true of any year in the three decades preceeding 1851, though particularly after

1843 when - to use phrases borrowed from a doggerel verse published in Duncan's

Weekly Register on December 14, 1844 - "Senators of Sydney" identifying the

colony's welfare with "her Squatters' weal, her strength with . . . their brood",

legislated "for sheep". Brisbane, Darling, Bourke and Gipps had each bent

imperial orders to peculiar colonial circumstances before 1843, thereafter

large squatters bent it to their own designs as much as changing colonial

circumstances permitted.

267 G. W. Rusden, History of Australia, (London, 1897), Vbl. II, p. 47. 306

PART IV

WOOL AND THE NEW SOUTH WALES

ECONOMY BEFORE 1851 307

CHAPTER VII

Wool and the New South Wales Economy Before 1851

A gaol then a sheep-walk, a governmentally-controlled prison economy then a private enterprise pastoral economy; such has been the usual depiction of the development of New South Wales before 1851. Implicit in this interpretation is the notion that development - social, political and economic - is in some undefined way associated with the dominant purpose of the colony, seen as initially penal and subsequently pastoral.

Posit%*iing commissariat purchases of supplies ,internally produced yet purchased with a form of foreign exchange (Treasury Bills);as equivalent to an export, McCarty'*' suggested a means of explicitly recognizing the connections between the general characteristics of New South Wales devel­ opment before 1851 and its changing purpose, viz., staple theory.

The staple approach was first expounded some forty years ago by

W. A. Mackintosh and Harold Innis: "Mackintosh's 'staple approach' was fundamentally a theory of economic development emphasizing the leading role of exports; Innis made of staple production the central theme around which to write the total history of Canada's economic, political and social

\j. W. McCarty, "The Staple Approach in Australian History", BAH, February, 1964, pp. 1-22. 308 2 institutions".

More recently M. H. Watkins has restated the staple approach in a systematic form, stressing the effect of linkages; the investment the production of an export staple induces for (i) local production of inputs for the export sector (the backward linkage), (ii) for local production utilizing the output of the staple industry as an input (the forward (vir linkage), and (iii) for local production to meet the demand^consumer 3 goods created by the staple production (the final demand linkage).

In an article published simultaneously with Watkins', G. W. Bertram offered the following outline of the staple approach:

The basic factors determining economic growth in expanding economies . . . have been the success of export staples, the structural characteristics of the export industries, and the disposition of income received by the export sector. The staple theory requires that, in an open economy . . ., development can only proceed if it is related to the special characteristics of the . . . international economy. From the viewpoint of the staple-producing country or region, demand for the staple export was largely an exogenous factor .... Given the natural resources /within this region/, there existed a series of production possi­ bilities which were to develop with technological change /within the importing country/. . . and with further settlement in a rich resource base under the guidance of public policy. The success of the export sector depended upon the degree of comparative ad­ vantage the product possessed, and this in turn depended upon the resource endowment, international commodity prices, transportation costs, and relationships with established trading systems.

W. T. Easterbrook and M. H. Watkins (ed.) Canadian Economic History (Toronto, 1967), p. x. 3 M. H. Watkins, "A Staple Theory of Economic Growth", Canadian Journal of Economics and Political Science, May, 1963, pp. 141-58. 4 G. W. Bertram, "Economic Growth in Canadian Industry, 1870-1915: The Staple Model", Canadian Journal of Economics and Political Science, May, 1963, pp. 162-84. The relevance of this approach to New South Wales experience during the three decades preceeding the discovery of gold appeared "fairly evident" to

McCarty? Colonists had commonly referred to wool as the staple during this period and had asserted that the colony's progress depended on its successful export: historians had generally depicted this period as one in which 'wool'*’ shaped the social, political and economic development, implicit­ ly employing in a vague way an Innis-type framework.

There were some dissenters. Alan Barnard accepted the role usually as­ cribed to wool in relation to its influence on social, political and urban development, but added:

the contribution of the pastoral industry to Australian economic development can too easily be misunderstood. Wool did not produce an overwhelming part of Australia's national income and provided probably, an even smaller part of Australian employment. Directly, it produced a substantial demand for investible funds and was an important avenue for private capital formation. Its outstanding place in the Australian economy of the nineteenth century arose from its dominating position as an export commodity. The growth of a large, highly profitable export industry encouraged a related growth of services, not only in the form of transport and personal services but also of highly specialized banking and marketing agencies.

It could be argued however that Barnard was implicitly subscribing to a staple view of development by suggesting that the production of wool induced invest­ ment in related areas, so that while wool production accounted for only a

^McCarty, op. cit., p 10

^A. Barnard, The Australian Wool Market, 1840-1900, (Melbourne, 1958), p. xv. 310

minor part of national income the multiplier effects of this export

increased its importance beyond that indicated by its direct contribution

to national income.

McCarty's advocacy of the relevance of the staple approach brought

forward articles which discussed inter alia the importance of wool in the

pre-1851 economy: one by Blainey and one by N. G. Butlin. Blainey

accepted the relevance of the staple approach but suggested that the im­

portance of wool had been exaggerated, contending that wool was "supreme

in the economy only in the eighteen years 1834-51".^ This he established

by arguing: "if total exports from pastures and colonial fisheries could

be roughly computed for the years to 1834 it is unlikely that pastures

would have more than a small lead and it is possible that fisheries would g have a considerable lead". Moreover, Blainey argued, "if it is true

that a staple's influence on its region came not only from the value of

the income it earned but also from its technology, then the case for the

fisheries as the mbre important staple /before 1834/ increases".^

• •■■■n :: :• "< / V " ’ ' ” ' ■ ■

^G. Blainey, "Technology in Australian History", BAH, August, 1964, p. 120. g Ibid. , p. 121. Blainey presented meagre data to substantiate his claim though figures for both wool and fisheries exports from 1826 onwards can be found in various editions of Votes and Proceedings . . . and in Bluebooks. This data shows (i) that the total value of fisheries exports exceeded that of wool exports for the period 1826-33 by nearly L130,000; (ii) that the annual value of fisheries exports was greater than that of wool ex­ ports for each year before 1834 except 1826, 1828 and 1829; and (iii) that from 1834 onwards the annual value of wool exports exceeded that of fisheries exports. This might appear to substantiate Blainey's argument, but, a notation in one Bluebook, points out that the figure for fisheries exports represented the produce of "vessels belonging to or sailing from the colony", i.e., of vessels owned by colonists and overseas residents, which suggests that export figures included the production of American and British ships. Furthermore, this basis seems to have remained unaltered so while the total value of fisheries exports would be included in Gross Domestic Product, only part would be in­ cluded in Gross National Product, which should be the focus of our attention. 311

Now it may not be denied that shipbuilding was an important colonial secondary industry before 1850, nor that urbanization was a significant feature in New South Wales, but to attribute them solely or even primar­ ily to the existence of a fisheries industry}^* then cite the presence of these effects as evidence of the importance of the fisheries is a somewhat dubious procedure. Shipbuilding was initially begun to provide a means of transporting grain from the Hawkesbury area to Sydney: a further demand for ships grew out of the need for ships to bring grain from Van

Diemen's Land; and later ships were needed to take supplies to and bring wool from ports along the coast such as Port Stephens and Twofold Bay.

Urbanization was initially a product of the penal function of the colony"^ and grew as mercantile activity increased. Perhaps the fisheries aided the growth of shipbuilding and urbanization, but at best its contribution was marginal. Furthermore if the staple is to be identified as the in­ dustry producing the greatest export income, then the commissariat must be so named, for the volume of Treasury Bills drawn in New South Wales exceeded the earnings of either wool or fisheries exports till 1836, so if Blainey's method of identification is to be used, the development before 1836 would

^Ibid., p. 122.

^At this point of his argument Blainey began to refer to whaling instead of fisheries, i.e. sealing and whaling. Sealing entailed a different technique of production, and the linkages spelt out by Blainey for whaling would have a different strength and character to those of sealing, which before 1821 at least, was the main fisheries industry for colonists.

11See Ibid., pp. 127-8 312

have to be explained by reference to a commissariat staple and thereafter

by a wool staple. Perhaps Blainey is right in discounting the significance

of wool as the staple to be employed if the staple theory is to be used, but 12 not for the reasons he advances.

N. G. Butlin, in the second comment made on McCarty's advocacy of staple 13 theory, contended that this approach was, at best, of extremely limited use.

Pointing to McCarty's claim that it was "the technology of the staple that

determined (sic) the growth and structure of the economy, along with its pol­

itical and social structure" Butlin commented:

These assumptions may determine structure and growth in one significant and historically interesting sense. They determine the types of goods produced, the types of inputs and the type of forward linkages. But the fundamental dimensions of growth - the rates and levels of aggregate and per capita output, the distribution of domestic factors between al­ ternative uses or the factor reward differentials within the colony or as between the colony and Britain - are not determined. At the simplest possible level, the admission of 'forward linkages' introduces the compli­ cation of relative profitabilities as between the 'staple' and the altern­ ative activity receiving the input a^ the consequential competition for resources between the two industries.

Blainey's argument is somewhat vague concerning the pattern of staples before 1851. He refers to the fisheries as being more important than wool before 1834 but he makes no mention of the initial penal function of New South Wales and its effect on development. Does he mean to suggest that by putting fish­ eries into the central slot of the staple theory it is possible to explain development between 1788 and 1834? His argument could however be interpreted in two other ways: that wool and fisheries should both be regarded as staples before 1834; or that the fisheries should be interposed as a staple between the commissariat staple period designated by McCarty and 1834. A mixture of these latter two possibilities would appear to be the only one of any consequence. 13 N. G. Butlin, "Growth in a Trading World: The Australian Economy, Heavily Disguised", BAH, August, 1964, pp. 138-58. 14 Ibid., p. 143. 313

According to Butlin, sustained growth depended on "a substantial inflow of labour and capital", and this on "a sufficiently large per capita different­ ial between Australia and Britain".^ An increase in British demand for wool initially "stimulated an internal readjustment of all domestic factors towards pastoral activity", but to sustain this resultant increased income required additional inflows of labour and capital**, "given human, social and genetic limitations'\ and assuming no change in the export's production 16 methods. To attract labour, its reward in Australia had to be appreciably greater than in Britain, but it was not sufficient inducement to offer simply higher money income, real income and psychic income had also to be higher: immigrants had British tastes and therefore had to be sure of being able to obtain commodities which formed part of the "British preference systems" but which could not be produced in the colony "because of the limited resources, skills and scale of the local economy". Therefore, Butlin argues,to obtain these immigrant-attracting imports it is necessary to have additional exports: to attract labour there had to be both "a sufficient relative growth of ex­ ports" (i.e. in the ratio of exports to imports), and a growth in local out­ put (apparently of consumer goods) to ensure a significant difference in per capita real and psychic income. But to obtain the necessary growth in

Ibid. , p. 144. Butlin does not specify what the differential is in, though the content suggests real income. If so it is difficult to see the relation with capital inflows unless it is assumed that all capital inflows represented immigrants' funds. 16 Butlin makes no allowance for this possibility, apparently assuming that all technological possibilities required larger amounts of capital and labour than were available to the pastoral industry. But yield per sheep might have been increased by more careful breeding practices requiring little or no additional capital. 314 exports it was necessary to attract labour from the non-export sector in the colonial economy and this depended on "the movement of relative pro­ fitabilities within the local economy".

Irrespective of the logical consistency of this model, its relevance to conditions in New South Wales before 1851 is minimal. It makes no allowance for the importance of convicts in the labour force: even in the period 1837-40, the last years of convict transportation to New South Wales and years when the assisted immigration programme was being stepped up,

11,365 convicts arrived in New South Wales compared to 37,125 immigrants, and of these totals there were 9,310 male convicts and 16,402 adult male immigrants!"^ Only during the 1840s was the labour inflow into the colony 18 composed primarily of free immigrants; during the 1820s and the first half of the 1830s it consisted of convicts. To spell out the conditions needed to attract free labour as those determining the rate of growth throughout this entire period would therefore seem to be futile: it is at best applicable to the 1840s and possibly the last few years of the 1830s.

Furthermore the flow of assisted immigrants represented over eighty per cent of the number of immigrants in New South Wales from 1837 onwards, and the primary determinant of the size of this flow was the capacity of the colony to finance it, i.e., the proceeds of land sales.

^R. Mansfield, Analytical View of the Census of New South Wales for the Year, 1841, (Sydney, 1841), p. 51. 18 It was almost entirely dependent on free immigrants except for the few shiploads of convicts which arrived at the end of the 1840s. 315

Another equation in Butlin's model which can be questioned is the dependence of imports on exports he postulates in his statement, "a sufficient relative growth of exports should be generated that the result­ ing exchange of imported goods . . According to thiS|a growth in exports was a necessary pre-requisite for a growth in imports, yet data for exports and imports during this period do not show such a lagged relationship. It was a common complaint in the early 1820s that cargoes consigned by English merchants far exceeded the colony's demand for imports:

"it appears as if the good people of England had anticipated the progress of the colony by twenty years", Berry commented concerning the flow of im- 19 ports in November, 1822. Such complaints continued with varying degrees of intensity till the early forties, in fact, the excessive flow of imports during the latter half of the 1830s was cited by some as a cause of the depression. One propoent of this view was A Caswell, who, in his book,

Hints from the Journal of an Australian Squatter, published in 1843, wrote:

The stagnation of the home trade with the United States, the disturbed condition of Canada, and the war in China, all, more or less, combined to force upon our Australian Colonies that produce for which we found no demand in the ordinary quarters, and as the exports from our colonies could not keep pace with their forced imports, the consequence was that they were not only overstocked with English produce, but were drained to an almost^^ncredible extent of the universal medium of exchange- money.

19 Berry Papers, Mss. - Mitchell Library 20 Caswell, 0£. cit. , p. 6. Such explanations also appeared in Sydney newspapers in the years 1840-3. It was a common complaint that London mer­ chants often sent double the amount of goods ordered by local merchants. 316

Gipps also saw the excess of imports as an integral part of the process

which led to the depression of the early forties In his address to the

Legislative Council on September 9, 1842, he spoke of the increased flow 21 of unassisted immigrants during the late thirties and how the mechanism

by which they transferred funds to the colony affected the flow of imports:

A man who, when about to emigrate to New South Wales, purchases in London a bill on Sydney, . . . /then/the party /who sells him the bill/ must send merchandize to meet the bill he draws . . . The desire to emigrate to Australia . . ., causing a great demand for bills on Sydney, such bills were drawn, and, in order to meet them, vast quantities of goods were sent to Sydney, which were never ordered; in fact, the consignments of goods were no longer regulated by the state of the market in the colony, or by the demands of the merchants resident in Sydney, but by the demand which existed in London for bills on Sydney.

An increase in exports resulting in a flow of imports into New South

Wales cannot therefore be regarded as prerequisites for immigration, as

Butlin suggests, for a considerable part of the volume of imports was either

an accompanimentjor a consequence of immigration ♦ an accompaniment when

immigrants transferred funds in the form of merchandise (a common practice

in the 1820s); a consequence when they transferred funds in the form of a bill on a Sydney merchant purchased in London (a common practice in the late

21 In 1835, 883 unassisted migrants arrived in New South Wales; in 1836, 913; in 1837, 813; in 1838, 1,328; in 1839, 2,133; and in 1840, 1,849. (Votes and Proceedings . . ., passim). 317

1830s). Throughout the period before 1851 the volume of imports flowing into New South Wales was to a significant degree exogenously determined because of the institutional framework then existing.

The same was true of capital inflow. Beyond the captial "transferred 22 essentially by the import of consumer goods" (i.e., credit advanced to local merchants), and capital introduced in the form of immigrants' funds, there was a flow of capital through the establishment of companies such as the Australian Agricultural Company, banks such as the Bank of Australasia, non-banking financial institutions, while British capital was also sent to 23 private agents for investment in the colony. The determinants of the flow of the first two associated categories of inflow have already been discussed: the flow through the other channels was largely the result of the interpret­ ation of evidence presented in Britain concerning the colony's present prosperity and future prospects. Gipps, when discussing the "excessive quantities" of capital introduced into New South Wales in the period 1835-40, stated:

Various circumstances conspired during that period to turn the attention of English capitalists to the Australian colonies. I will allude only to the attractive theories which were then put forward by the disciples of the Wakefield school, and to the vauntings of the excessive riches of New South Wales, which are to be found in the evidence taken before the Transportation Committee of the House of Commons. 24^e rea-*- El Dorado was at last said to be found in Australia . . .

22 N. G. Butlin, Investment in Australian Economic Development, 1861-1900 (Cambridge, 1964), p. 25 23 Funds were commonly sent to Sydney merchants for investment, or to persons already in the colony. (See John Rawson's comment, p. .) 24 Gipps' speech of September 9, 1842. 318

Colonists also cited the Forbes Act of 1834 guaranteeing a high minimum rate of interest as a factor attracting British capital from 1835 onwards.

But even before 1835 British capital had flowed readily: drought conditions

in the late 1820s had slowed it down for a time but at no stage before 1851 did colonists complain of a shortage of capital. Until 1842 capital freely

flowed from Britain,where interest rates were low, to New South Wales where potential profits looked high, and where after 1834, high interest rates were legally enforceable: after 1842 the flow was more subdued yet a common complaint during the post-1842 period was that funds already in the

colony were being allowed to remain idle.

Because Butlin's alternative has obvious deficiencies as a framework within which to analyze the behaviour of the New South Wales economy before

1851 does not mean that we must revert to the view that growth was export-

led: that we must identify a staple, to which must be linked all the ob­

served characteristics of the growth process. It could be that Butlin’s views established from his examination of the 1861-1900 period substantially apply to the pre-1851 period: that "Australian economic history was not a footnote to the Industrial Revolution nor was Australia a sheep-walk for 25 the benefit of British imperialism"; that "the basic determinants of the

speed, stability and complexity of Australian growth were in local Australian 2 6 conditions"; that "the rate of Australian growth was not intimately dependent

25 N. G. Butlin, o£. cit., p. 5

^^Ibid., p. 31. 319

on export receipts".

Though commissariat purchases lacked the essential characteristic of

a true export - the market was circumscribed by domestic demand and was

therefore not capable of expansion beyond that allowed by local population

growth - treating them as a quasi-export for insertion into a staple theory 28 framework can illumine the process of growth in New South Wales before 1821.

Wool then played a minor role, but during the last few years of Governor

Macquarie's administration it was becoming obvious that the further progress

of the colony depended upon the development of exports, and it was acknowledged

that wool had the most potential in this regard. Changes made in 1822 by

Governor Brisbane, just after his accession to office, forced colonists to

recognize the absolute necessity of export development and wool therefore

assumed an even more significant importance in colonists' thinking. The

expected future returns on wool attracted both local and British entrants

to the industry, but this did not produce a sudden metamorphis in the

economic structure of the colony: the progress of the colony may have

become identified with wool exports, this did not mean it immediately be­

came completely dependent on them in the sense a simplified version of the

staple approach might suggest.

The identification had immediate consequences in the political realm

as pastoralists sought benefits only obtainable by administrative or legis­

lative action, and because future returns from wool were considered the

27 ’ ~~ ~ Ibid., p. 5 28 See G. J. Abbott and N. B. Nairn (eds.) Economic Growth of Australia 1788-1821, (Melbourne, 1969), Chapter 8. 320 highest available in the colony, there was investment in the 'forward linkages' associated with wool (i.e. in increasing sheep numbers) and this, in terms of the existing technology, involved some geographical extension of settlement. This investment was added to other investment induced by the demand exercised by the commissariat, and by the fisheries, though the forward linkage effect of pastoral expansion has been seen as the major element in the instability manifested in the boom and depression in the latter half of the 1820s.

While the identification of wool as a profitable future production fostered investment in livestock, this was not the only factor. The

Australian Almanack for 1831 in a chronicle of the events of the preceding seven years, pointed out that,

up to the year 1825 or 1826, a greater quantity of butcher meat had not been brought into the market than was required to supply the consumption of private families, and a small part of the public establishments. Large quantities of salted provisions had always continued to be imported, by the government, for a great portion of the convicts retained in the service of the Crown, or under colonial sentence at penal settlements; and salted pro­ visions, imported upon private speculation, had, up to that period, continued to find a ready market ....

/Then7 the Colonial Government recommended that no further supplies of salted provisions should be sent to the colony for the use of the public establishments, as it was considered capable of supplying all its inhabitants, of every class, with meat of colonial production. This measure contributed to extend the demand for butcher meat in the colony; and, joined to the independent circumstances of the stock­ holders, who were neither forced to limit their flocks and herds for want of pasturage, nor to raise money by parting with a share of what they possessed,^^ept the prices so high as to yield immense returns to the holders.

29 Australian Almanack (Sydney, 1831), p. 257. The initial statement saying that until 1825 or 1826 the supply of meat had not exceeded the demand cannot be construed to mean never before in the colony's history. During the mid-years of Macquarie's administration such a situation existed, but in 1820 Bigge had discerned the consequences of continuing to slaughter livestock at the rate then established. It was during the first half of the 1820s that the situation described existed. 321

In addition to the increased prices induced by the present and potential

demand for meat, the arrival of "a greater number of persons, possessing

considerable capital, and of individuals in a situation of life which pro­

cured them credit", and the establishment of the Australian Agricultural 30 Company served to further them. Though the behaviour of wool prices during

the preceding few years hardly justified immediate optimism, by the mid­

twenties "it was imagined that the growth of the wool from the sheep of the 31 colony was to produce perpetually a splendid income", high prices were

therefore paid for sheep and large profits were made from sales by estab­

lished producers.

The basis of this boom lay in the oligopolistic nature of the livestock

market. However, then livestock numbers increased and more suppliers appear­

ed, and "as might have been expected, the supply being greatly superior to

the demand, the value /of livestock? fell". At the same time the drought

which began in 1827 and continued to 1829 necessitated the importing of

foodstuffs which settlers had to purchase, "at an excessive price . . . and

in order to raise the funds for these purchases, it compelled them to make 33 forced sales of their live stock", so forcing prices even lower. Furthermore,

this depression was also materially assisted by a cause less to be expected than either the fall in the price of that portion of our

— “ The establishment of this company was cited in some explanations as the major factor in the livestock born of 1826. See T. H. Braim, History of New South Wales, (London, 1846), Vol. I, pp 64-7; J. D. Lang, An Historical and Statistical Account of New South Wales, (London, 1875), pp. 196-203. 31 Braim, op. cit. , Vol. I, p. 65. 32 Lieut. Breton, Excursions in New South Wales . . ., (London, 1833), p. 457. 33 Australian Almanack, (Sydney, 1831), p. 258. 322

flocks and herds, which finds its vent within the colony, or the severe droughts which accelerated that fall; namely, by the alter­ ation in the value of wool in the London market. This almost ex­ clusive article of export, on which the settler had as yet calculated and which he fondly hoped would al ways maintain a permanent or increasing value, had fallen from 50 to 75 per cent^nd it only wanted this to make the depreciation of property complete.

Returns from livestock sales declined as demand fell as expansion was checked by drought conditions and falling wool prices, and as supply increased as settlers sought to release sufficient funds for their immediate needs. Bills given for the purchase of livestock at inflated prices became due "till at length creditors became imperative in their demands for payment, being them­ selves generally pressed by other creditors either in the colony or in

England; and debtors who had nothing but their stock and land to look to, 35 found themselves suddenly and unexpectedly ruined". Flocks were seized and sold so further depressing prices and adding to the prevailing distress, yet after the value of wool exports fell in 1827, it rose in 1828 and 1829, declined in 1830 before rising again in 1830 before rising again in 1831.

The fact that wool exports rose as the depression deepened seems to suggest the inapplicability of the staple approach to the New South Wales experience before, say, 1831. If, as Watkins reports, according to staple theory "the size of the aggregate income will vary directly with the absolute size of the export sector", unless there were long lags in the linkage responses, the concurrence of depressed conditions and rising wool exports

34 Ibid. 35 Lang, o£. cit., Vol. I, p. 202. 323

could be construed to mean that the mechanism of the staple approach is

not able to explain the situation. But the staple theory involves a multiplier - accelerator interaction, and in this kind of growth model

it is difficult to incorporate an explanation of the business cycle: "if

the parameters of this system are such as to lead to explosive growth,

they cannot also lead to fluctuations, and the cycle therefore has to be

explained in terms of speculation, monetary disturbances, and other such 36 factors extraneous to the main process of capital formation". If

therefore the fluctuations evident in the 1826-1831 period are accounted

for by speculation - the common explanation given by contemporary comment­

ators - the apparent inapplicability of staple theory is negated, but this

still does not mean that staple theory can be used to explain the rate of

growth in New South Wales during this period; it does not follow that the

success of wool exports determined the timing and pace of development.

A petition soliciting trial by jury and taxation by prepresentation

drawn up early in 1827 claimed that the "gross annual Produce of the Land

and Labour of the Colony . . . cannot be estimated at less than Eight hundred thousand pounds", and that "of this Sum, about Two hundred and

fifty thousand pounds per annum constitutes the exportable Income . . .

and consists of rude Produce or of Bills on your Majesty's Treasury, and 37 other Bills, for which such produce is exchanged in this Colony". Now

o £ R. C. 0. Matthews, The Business Cycle, (New York, 1967), p. 231.

~^HRA Series I, Vol. xiii, p. 34. 324 the basis of this estimate is not clear though in all probability it was calculated in the same way as W. C. Wentworth made his estimate of 38 the value of output in 1821, i.e., by taking acreage figures for agri­ cultural products and livestock numbers for pastoral and importing some average ’yield' coefficient and then estimating items such as 'rent on houses' etc. At best the estimate appears reasonable and if so accepted it shows that in 1826 only L48,384 of the total estimated "annual produce" of L800,000 represented wool exports. But this minor contribution would not of itself invalidate a claim that wool exports were determining the rate of growth of the colony.

Henderson, in his Observations on the Political Economy of New South

Wales and Van Diemen's Land, published in 1829, sought an explanation for the high degree of urbanization evident in New South Wales. He took the population of Sydney as 20,000 (though he felt this estimate then current in the colony was "somewhat over-rated"), of whom he thought "4,000 receive their subsistence from the expenditure of the state" leaving 16,000 "whose means of subsistence remains to be accounted for". Manufacturing could account for at most 500, he thought, but otherwise the town of Sydney does not "contain within itself, any sources of wealth".

38 W. C. Wentworth, A Statistical Account of the British Settlements in Australasia, (London, 1824), Vol. I, pp. 471-2. 325

Consequently, with the exception of the whale fisheries, which are at present scarce worthy of a place in our calculation, the whole of this population derives its support from the trade with England. In other words, one-half nearly of the population of New South Wales derive their support and wealth from the mere transfer of produce of the Mothe^ Country, from the British vessel, to the cultivation of the soil. 40 Henderson's claim is exaggerated, and it might be nearer the truth to claim that a fifth of the colony's population derived "their support and wealth" directly from a trade based partly on an export income derived predominantly from Treasury Bills expenditure, but mainly from an autonomous flow of imports from Britain. Yet this inflow was a result of expectations based on the future of wool exports, so even it is not possible to suggest a dominant influence of ex post wool export returns on ex post gross national product, the importance of the capital inflow derived from the flow of imports must be acknowledged. And this captial inflow, on which the colony's pro­ gress so largely depended, arose from expectations concerning wool. The major source of export income till the beginning of the 1830s was the commissariat, but private capital did not flow from Britain to further this production, but to increase the production of wool.

From 1832 the annual rate of increase of returns from wool exports ac­ celerated (see figqre 10) so that whereas they had increased at an average annual rate of less than ten per cent between 1826 and 1831, between 1832 and 1836 they increased at an average rate of nearly fifty per cent per year,

Henderson, 0£. cit., p. 64. 40 The population of Sydney in 1828 was 10,815, and of New South Wales, 36,598. 326

Figure 10

Value of New South Wales Wool Exports, 1826-51 2000

Value

Source: Votes and Proceedings . . ., passim. 327 and between 1832 and 1851 at an average annual rate of slightly over twenty per cent. In terms of its rates of increase wool would qualify as the leading sector in the economy yet can the rate of growth of the econ­ omy be correlated with the rate of growth of this export?

Looking at the conditions in the 1832-51 period we can discern a sit­ uation where exports are increasing yet there are depressed conditions in the economy, and a situation where, after 1836 though the rate of increase of wool exports declined, the economy boomed, for "in the closing years of the 'thirties the boom became wilder and more and more reckless, based on the seemingly limitless prospects of the wider-ranging sheep; despite a downward trend in wool prices and two years drought in New South Wales 40 in 1838-39, the spread of the squatters continued". Within the frame­ work of the staple approach, which is basically a multiplier-accelerator model, the declining rate of increase of exports should slow down the rate of increase in investment, yet the late thirties in New South Wales saw an inverse relationship, so unless we wish to explain all such discrepancies as the result of speculative excesses or monetary disturbances there would appear to be little point in trying to fit New South Wales experience into a staple theory mould.

Professor Ashworth once stated that,

the value of the generalized models of economic theory to the his­ torian is in suggesting lines of enquiry and possible points of relationship that might otherwise have been overlooked. To apply such a model ready-made to a situation from which it was not derived,

40 S. J. Butlin, Foundation of the Australian Monetary System, 1788-1851, (Melbourne, 1953), p. 275. 328

to demonstrate how well some elements in that situation fit into the model, and to ignore the other elements or treat them as in- ^ significant exceptions is to abandon historical methods altogether.

This would appear very pertinent to the question of the applicability of staple theory: it could be fitted on,but the fit would not be good; it seems far preferable to use it as a means of indicating the possible relationships of development to wool production.

Only in this sense can the role of wool in the development of the

New South Wales economy during the 1830s and 1840s be designated. What was obvious then was that government policies were formed on the assumption that wool exports were the key to the colony's future progress; that capital and immigrant capitalists flowed to the colony as a result of the seeming boundless opportunities at a time when opportunities for investment in

Britain were limited; that this capital was used to purchase land in the expectation that its price would increase as the pastoral industry expanded, and that the consequent land revenue was used to bring assisted immigrants to New South Wales. These were the main features of the growth process during this period and the crucial factor which set it in motion was the recognition of the potential future income from wool exports. This was the key factor rather than the income realized from wool exports. Only by emphasizing the role of wool as the subject of these crucial expectations can the observed features of the development during the period 1822-51 be explained. The importance of the returns from wool have been exaggerated:

41 W. Ashworth, A Short History of the International Economy, (London, 1954), p 6. 329 they were but one source of pastoralists' income and perhaps a minor source, for the evidence suggests that pastoralists' profits depended to an inordinate degree on the sale of sheep. This departure may be inferred from the nature of technological development with its continued emphasis on increasing sheep numbers rather than on increasing yield per sheep or im­ proving the quality of the wool. The pastoral industry in the three decades before 1851 appears to have been geared to the supplying of the local market for sheep as much as to supplying the British market with wool. When demand for livestock was high the colony boomed, when demand fell the colony became depressed, and the way out was to discover a means of converting surplus livestock into a saleable commodity. In some ways, because there were joint products involved^the growth of wool exports was retarded for there was some incompatibility between producing good wool and producing * sheep*: yet without sheep sales to offset losses in wool production it may have languished. Only by recognizing that sheep­ farming involved two products can its role in the New South Wales economy before 1851 be appreciated. 330

BIBLIOGRAPHY 331

BIBLIOGRAPHY

I. Contemporary Sources

A. Manuscripts

(i) The following manuscript collections in the Mitchell Library each contain a considerable amount of material concerning the pastoral industry Macarthur Papers Riley Papers Hobler Manuscripts Lloyd Papers Collaroy Station Papers

(ii) The Rawson Papers preserved in the National Library, Canberra, provide an excellent summary of conditions in New South Wales in the late 1830s and the 1840s, while its Murray Papers give details of the operation of a sheep station in the 1840s.

(iii) The State Archives of New South Wales has within its collections material relating to land grants, immigration, etc.

B. Printed

(i) Official

Bigge, J., Report of the Commissioner of Inquiry on the State of Agriculture and Trade in the Colony of New South Wales, London, 1823. Bigge, J., Report of the Commissioner of Inquiry into the State of the Colony of New South Wales, London, 1822. ______Historical Records of Australia, 33 vols. in 4 series. Series I contains despatches to and from the Governor of New South Wales to 1848. ______Historical Records of New South Wales, 7 vols. (Vol. 1 has two parts) ______Votes and Proceedings of the New South Wales Legislative 1824-51

(ii) Books

Anonymous. A True Picture of Australia. Its Merits and Demerits. Glasgow, 1839. Atkinson, J. An Account of the State of Agriculture in New South Wales, London, 1826. 332

Balfour, J. A., A Sketch of New South Wales, London, 1845 Bennett, G., Wanderings in New South Wales, 2 vols., London, 1834. Betts, J., An Account of the Colony of Van Diemen's Land, Calcutta, 1830. Bischoff, J., The Wool Question Considered, London, 1828 Braim, T. H., A History of New South Wales, 2 vols., London, 1846. Breton, Lieut. Excusions in New South Wales, Western Australia and Van Diemen's Land, London, 1833. Brodribb, W. A., Recollections of an Australian Squatter, Sydney, n. d Byrne, J. C., Twelve Years’ Wanderings in the British Colonies, 2 vols London, 1848. Caswell, A., Hints from the Journal of an Australian Squatter, London, 1843. Collins, D., An Account of the English Colony in New South Wales, London, 1798. Cunningham, P., Two Years in New South Wales, London, 1828. Curr, E. M., Recollections of Squatting in Victoria, Melbourne, 1883 and 1965. Dawson, R., The Present State of Australia, London, 1831. Duggan, T. B., Essay on Catarrh in Australian Sheep, Sydney, 1848. Flanagan, R. , History of New South Wales, 2 vols., London, 1861. Gordon, P. R. , Fencing as Applicable to Sheep-Farming, Sydney, 1867. Graham, J. R., A Treatise on the Australian Merino, Melbourne, 1870. Harris, A., Settlers and Convicts, London, 1847. Haygarth, H. W., Recollections of Bush Life in Australia, London, 1848. Henderson, J., Observations on the Colonies of New South Wales and Van Diemen's Land, Calcutta, 1832. Hodgson, C. P. Reminiscences of Australia, London, 1846. Hood, J., Australia and the East, London, 1843. Jameson, R. G., New Zealand, South Australia and New South Wales, London, 1842. Joyce, A. A., A Homestead History, Melbourne, 1949. Lho^fs^Vy, J., Illustrations of the Present State and Future Prospects of the Colony of New South Wales, Sydney, 1835. Macarthur, J., New South Wales; its present state and future prospects, London, 1837. McKenzie, D., Ten Years in Australia, London, 1851. McKenzie, D., The Emigrants Guide, Sydney, 1845. McQueen, T. P., Australia; As she is and as she may be, London, 1840 Martin, R. M. , History of the British Colonies, London, 1834. Melville, H., The Present State of Australia, London, 1851. Mudie, J., The Felonry of New South Wales, London, 1837. Sidney, S., The Three Colonies of Australia, London, 1853. Strzelecki, P. E. de, Physical Description of New South Wales and Van Diemen's Land, London, 1845. Therry, R , Reminiscences of Thirty Years1 Residence in New South Wales and Victoria, London, 1863. Trimmer, J. K., Practical Observations on the Improvement of British Fine Wool, London, 1828. 333

Wakefield, E. G., Letter from Sydney, London, 1829. Waugh, D. L., Three Years1 Practical Experience of a Settler in New South Wales, Edinburgh, 1838. Wentworth, W. C., A Statistical Account of the British Settlements in Australasia, 2 vols., London, 1824. Wentworth, W. C., A Statistical, Historical and Political Description of New South Wales, London, 1820. Westgarth, W., The Colony of Victoria, London, 1864.

(iii) Newspapers and Periodicals

Atlas, Sydney, 1844-8. Australian, Sydney, 1824-48. Chronicle, Sydney, 1839-48. Colonist, Sydney, 1835-40. New South Wales Magazine, Sydney, 1843. Sydney Gazette, Sydney, 1803-42. Sydney Morning Herald, Sydney, Founded 1831 'TiHe im Weekly Register, Sydney, 1843-5.

II. Secondary Sources

(i) Books

Barnard, A., The Australian Wool Market, 1840-1900, Melbourne, 1958. Basset, F. M., The Hentys, London, 1954 Billis, R. V. , and Kenyon, A. S., Pastures New, Melbourne, 1930 Bonwick, J., Romance of the Wool Trade, London, 1887. Bride, T. F., (ed.), Letters from Victorian Pioneers, Melbourne, 1898 Barfitt, C. T., The History of the Founding of the Wool Industry in Australia, Sydney, 1913. Burroughs, P., Britain and Australia, 1831-1855, Oxford, 1967. Butlin, N. G., Investment in Australian Economic Development, 1861-1900, Cambridge, 1964. Butlin, S. J., Foundations of the Australian Monetary System, 1788-1851, Melbourne, 1953. Carter, H. B., His Majesty's Spanish Flock, Sydney, 1964. Clark, C. M. H., A History of Australia, vol. 1, Melbourne, 1962. Coghlan, T. A., Labour and Industry in Australia, 4 vols. London, 1918. Collier, J., The Pastoral Age in Australasia, London, 1911. Cumpston, J. S., Shipping Arrivals and Departures - Sydney, 1788-1825, Canberra, 1963. Dunsdorfs, E., The Australian Wheat-Growing Industry, 1788-1948, Melbourne, 1956. Ellis, M. H., John Macarthur, Sydney, 1955. Fitzpatrick, B. C., The British Empire in Australia, 1834-1939, Melbourne, 1949. Fitzpatrick, B. C., British Imperialism and Australia, 1783-1833, London, 1939. 334

Greenwood, G. (ed.), Australia, A Social and Political History, Sydney, 1955. Hancock, W. C., Australia, Sydney, 1945. Hartwell, R. M., The Economic Development of Van Diemen's Land, 1820-1850, Melbourne, 1954. Kiddle, M., Men of Yesterday: A social history of the western district of Victoria, 1834-1890, Melbourne, 1961 Lang, J. D., An Historical and Statistical Account of New South Wales, 2 vols., London, 1875. Mclvor, C., The History of Sheep Fanning ♦ . ., Sydney, 1893 Madgwick, R. B., Immigration into Eastern Australia, 1788-1851, London, 1937. Matthews, R. C. 0., A Study in Trade-Cycle History, Cambridge, 1954 Mills, R. C. , The Colonization of Australia, 1829-1842, London, 1915 Nadel, G. H., Australia's Colonial Culture, Melbourne, 1957. Onslow, S. Macarthur, Some Early Records of the Macarthurs of Camden, Sydney, 1914. Perry, T. M., Australia's First Frontier, Melbourne, 1963. Rickards, T., An Epitome of the Official History of New South Wales, Sydney, 1883. Roberts, S. H., History of Australian Land Settlement, Melbourne, 1924. Roberts, S. H., The Squatting Age in Australia, 1835-1847, Melbourne, 1964. Roe, M., Quest for Authority in Eastern Australia, 1835-1851, Melbourne, 1965. Rusden, G. W., History of Australia, London, 1897. Shann, E., An Economic History of Australia, Cambridge, 1930. Shaw, A. G. L. , Convicts and the Colonies, London, 1966. Trow-Smith, R., A History of British Livestock Husbandry, 1700-1800, London, 1959. Ward, J. M., Empire in the Antipodes, London, 1966. Ward, R., The Australian Legend, Melbourne, 1962.

(ii) Articles

Baker, D. W. A., "The Squatting Age in Australia", Business Archives and History, v, August, 1965, pp. 107-22. Beever, E. A., "The Origin of the Wool Industry in New South Wales", Business Archives and History, v, August, 1965, pp. 91-106. Beever, E. A., "Further Comments on the Origin of the Wool Industry in New South Wales", Australian Economic History Review, viii, September, 1968, pp. 123-8. Blainey, G., "Technology in Australian History", Business Archives and History, iv, August, 1964, pp 117-37. Buckley, K., "E. G. Wakefield and the Alienation of Crown Land in New South Wales to 1847", Economic Record, xxxiii, April, 1957, pp. 80-96. 335

Buckley, K., "Gipps and the Graziers of New South Wales, 1841-6", Historical Studies, vi, May, 1955, pp 396-412, and vii, May, 1956, pp. 178-93. Butlin, N. G., "Growth in a Trading World: The Australian Economy, Heavily Disguised", Business Archives and History, iv, August, 1964, pp. 138-58. Dyster, B., "Support for the Squatters, 1844", JRAHS, li, March 1965, pp. 41-59. Fogarty, J. P., "The New South Wales Pastoral Industry in the 1820s", Australian Economic History Review, September, 1968, pp. 110-22. Ker, J. "The Wool Industry in New South Wales, 1803-1830", Part I, Bulletin of the Business Archives Council of Australia, Vol. I, No. 9, pp. 25-49; Part II, Business Archives and History, ii, pp. 18-54, February, 1962, pp. McCarty, J. W., "The Staple Approach in Australian Economic History", Business Archives and History, iv, February, 1964, pp. 1-22. Philipp, J., "Wakefieldian Influence and New South Wales, 1830-1832", Historical Studies, vii, May, 1956, pp. 205-10. BIBLIOGRAPHY - ADDENDUM fManuscript Collections - Mitchell Library. Macarthur Papers. 1789 onwards. There are over a hundred volumes of correspondence between members of the family resident in England and those resident in New South Wales during the period 1809-51. Statistical and other data concerning sheep and wool are contained in Volumes 67-71 of the series.

Riley Papers. 1807 onwards. This collection contains material about the sale of wool in England in the 1810s; the purchase of sheep overseas in the early 1820s; and the problems of managing a sheep station in the 1830s.

Hobler Diary. 1825-51. The first eight volumes of this diary trace Hobler's career from his departure from England in 1825, during his residence in Van Diemen's Land from 1825 till 1835, and in New South Wales from 1835 till 1851. During this last period Hobler ran a sheep station in the Hunter River district,then in 181+1+ moved to Goulburn where he leased a sheep station for a time, before squatting on an area near the junction of the Lachlan and Murrumbidgee rivers.

Lloyd Papers Vol. II. 181+1 onwards. This volume contains the reminiscences of Charles Lloyd who came to New South Wales in I85U, and his history of his brother's activities in New South Wales from. l8Ul. His brother managed sheep stations in the Liverpool Plains district during the l8U0s.

Collaroy Station Papers. 182^-52. This collection includes correspondence between Richard Jones, a Sydney merchant, and C. Roemer about the purchase of sheep in Germany in the early 1820s; some accounts of the expense of breeding merino and Saxon sheep in the Hunter River district in the late twenties and mid-thirties; and some accounts of sales of improved breeds of sheep.

Roby Station Correspondence. 1832-36. This volume has some letters, generally about mundane matters, written in 1832-33 by the manager of Alexander Riley's property, and also lists of rations issued on the station in 1835-36.

Hogan Papers. 1830-33. Hogan managed a station near Goulburn for William Lithgow, a government official in Sydney. This volume contains instructions issued by Lithgow to Hogan.

Government Papers.

(a) Votes and Proceedings of the New South Wales Legislative Council The Reports (including Minutes of Evidence and Appendices) of the following committees of the Legislative Council contain material of relevance to this study. 183*+ The Sub-Committee on the Interest Bill 1835 The Committee on Immigration The Committee on Police and Gaols 1837 The Committee on Immigration, Indian and British, into New South Wales. 1838 The Committee on Immigration The Committee on the Catarrh in Sheep Bill 1839 The Committee on Immigration 18U0 The Committee on Immigration l8Ul The Committee on the Land and Immigration Debenture Bill The Committee on Immigration The Committee on Immigration - 3 -

181+3 The Select Committee on the Monetary Confusion The Select Committee on the Petition from Distressed Mechanics and Labourers The Select Committee on the Crown Land Sales Act The Select Committee on Immigration 1844 The Select Committee on Crown Land Grievances The Select Committee on Distressed Labourers 1845 The Select Committee on Immigration The Select Committee on the Preferable Lien on Wool Act The Select Committee on the Scab and Catarrh in Sheep 1846 The Select Committee on the Renewal of Transportation 1847 The Select Committee on Immigration The Select Committee on the Minimum Upset Price of Land 1849 The Select Committee on Catarrh in Sheep The Select Committee on Crown Lands

(b) British Parliamentary Papers Report of the Select Committee on the State of the British Wool Trade. Sessional Papers of the House of Lords 1828, Vol.V

Report of the Select Committee on Transportation, Parliamentary Papers, 1837, Vol.XIX; 1837-8, Vol.XXII.

Journal Articles Baldwin, R.E., ’’Patterns of Development in Newly Settled Regions", The Manchester School of Economic and Social Studies, May 1956, pp.161-79. Bertram, G.W., "Economic Growth in Canadian Industry, 1870-1915. The Stape Model", Canadian Journal of Economics and Political Science, May 1963, pp.162-84. Watkins, M.H., "A Staple Theory of Economic Growth", Ibid, pp.l4l-58.