Trade and Travel in the Far East Part 6

Were I again to turn Australian farmer, I would stable my working cattle, keep a man to take care of them, grow ten acres of Lucerne hay to feed them, save their manure, (an article almost universally thrown away in Australia,) get double work out of them, and have the satisfaction of seeing my ploughs going at regular hours, in place of being worried "from July to eternity," as Sam Slick says, by having to search for the cattle in the bush. It often struck me, that the Australian grazier loses a chance of making a good deal of money by neglecting his dairy produce. Had he a regular establishment in the bush where his herds run, to milk the cows and make b.u.t.ter and cheese, it would not only, in my opinion, pay well for the trouble, but would make his cattle much less wild. His having forty or fifty cows brought home every evening to milk, would not only make their calves quiet and tractable, but would also compel the stock-keeper to be more active, would keep him at his duty, and, I feel satisfied, would save the proprietor a great deal in the course of the year. The b.u.t.ter and cheese here are both of excellent quality, and might be made in large quant.i.ties; yet, both are regularly imported into Sydney from the Derwent (Van Diemen's Land) and Port Phillip; a state of things the settlers of New South Wales ought to be ashamed of.

Many a fine cattle-run is rendered useless in dry seasons, by want of water. Nature has provided, all over the country, reservoirs (or tanks) for water, which are filled by every heavy rain; and their contents last a long time: still, in a very dry season, these fail; and many a thirsty bullock loses his life by tumbling, from excessive weakness, into one of those pits. Some parts of the country have no tanks, (or water-holes, as they are called,) except a few muddy puddles at the foot of the hills, and thus become unavailing sooner than other parts. This inconvenience might in a great measure be remedied, at trifling cost, by constructing dams at properly chosen places in the ravines or gulleys that intersect the hills from top to bottom, every two or three hundred yards. In one instance, I have seen this plan adopted with success. The owners of property between Sydney and Paramatta are compelled to make tanks, the water in the river being salt, and that procured by digging wells being very little better. Water, Water, is the cry, in dry seasons, all over this otherwise highly favoured country; and till the end of time, this want will prevent New South Wales from becoming a densely populated country.

The horse-fancier may invest a few hundreds very profitably in the purchase of some really good brood mares. From these, he will not only draw a good return for his money, but will also derive a great deal of pleasant pastime in superintending the breaking-in of his colts and fillies. Horse-stock, like every other, has fallen much in price lately, but will doubtless recover itself when times improve. I am acquainted with more than one proprietor who has made no inconsiderable sum of money by rearing horses. There is a constant demand for them; and of late, a good market has been found in India for those suited for cavalry.

Another profitable investment for money is to be found, in Sydney, in the way of mortgage. Ten and twelve per cent, is paid regularly, and security given of an undoubted character,--security that has not in one instance failed the mortgagee, even in the recent desperate times. Large sums may be invested in this way; and for the absent capitalist, it is the mode of investment I would recommend in preference to any other.

Bank Shares used to be in great favour with monied men when I was in Australia. The holders have, however, had a severe lesson since then, having suffered seriously by some failures among those establishments.

CHAPTER XII.

NEW SOUTH WALES.

CAUSES OF THE RECENT DISTRESSES--CONDUCT OF THE BANKS--MANIA FOR SPECULATION--LONG-ACCOUNT SYSTEM--BAD SEASONS.

I will now proceed to offer a few remarks on the causes of the late terrible distresses in New South Wales, and on what I consider as the best means of preventing the recurrence of such lamentable scenes.

The three main causes of those distresses were, undoubtedly:--

First, Harsh and illiberal conduct on the part of the Banks.

Secondly, A wild speculation-mania that took possession of the entire population.

Thirdly, The system that had obtained, of giving long credit to purchasers of stock, &c.

While I look upon these three as the primary and princ.i.p.al causes of by far the greater part of the suffering the Colony has recently undergone, I must specify another, though certainly a secondary cause; namely, two successive bad seasons. This last cause is, I am aware, by many persons, regarded as the chief source of all their distresses and losses; but I think I can shew that those parties are wrong in this opinion, which springs from their anxiety to frame an excuse for their very imprudent speculations.

In the first place, then, I accuse the Banks of harsh and illiberal conduct; and I will state my reasons for this charge.

When I arrived in Sydney in 1836, the Banks, without exception, but more particularly the Commercial Bank (then under the management of a would-be shrewd Aberdonian), were doing every thing in their power to induce parties to open accounts with them. Bills for discount were eagerly sought after, and little attention was paid to the respectability of the names of either drawer or endorser. Cash-advances were publicly advertised by the Commercial Bank. Parties, to my certain knowledge, were stopped in the street by the Aberdonian just alluded to, who solicited their business with a very bland smile. In short, no stone was left unturned by these money-seekers to add to their half-yearly dividends. This system went on till the latter end of 1839. I need scarcely say, that this unbecoming and greedy canva.s.sing for business, tempted many an unwary merchant and settler to venture beyond his depth, and ultimately led to ruin and a prison. The amount of money represented by absolutely valueless paper at this time, is quite beyond calculation. Renewals were a matter of course. Cash payments, even in part, were the reverse of common. Bank-directors overdrew their accounts with perfect impunity to a large amount; and the whole Colony seemed intoxicated with the fond notion that the Banks would never fail them, and that, in those fountains, they would at all times find a never-ending supply of "the needful." In the midst of this mad career, the day of reckoning came suddenly upon them. The Banks took the alarm: they began to think they had allowed the kite-flying system to go too far; and they commenced a system of unparalleled harshness and oppression towards their _gulls_. Cash advances were not merely stopped, but those previously made were called in. Renewals would no longer be accepted, even for half or a quarter of the amount due; and the unfortunate "kite-flier" was, in hundreds of cases, ruined by the very men who had in the most unprincipled manner led him into the mire, and then left him.

The Banks now took up a position the very opposite of that hitherto occupied by them; and, instead of trusting everybody, put no faith in any one. This conduct ultimately recoiled upon themselves; their shares fell in value; some of them became bankrupt, while the others had a hard struggle to avoid that catastrophe; and the public lost all confidence in banks and bankers. The worst part of the tale remains to be told; namely, that many widows and orphans, whose all was invested in bank shares, were utterly ruined and reduced to dest.i.tution by the failures alluded to.

I come now to the second main cause of Australian distress, viz. the speculation-mania that took possession of the entire population of this fine Colony. No one who did not witness the effects of this mania, can imagine to what an extent it was carried. Scarcely a day pa.s.sed without one or more public auctions of stock of all descriptions; and not a sale took place, that was not crowded with eager purchasers. Many large stock-holders took advantage of the high prices obtained at those sales, to sell off, in the delusive hope that they would in this way be enabled to retire from active life, and perhaps to return to their native country. The terms offered at those public sales, were such as to induce many persons who never even dreamed of sheep or cattle farming, to enter the market and purchase to a large extent. These terms were, in general, something like the following:--

Ten per cent, on the fall of the hammer;

Thirty per cent, by bill at twelve months;

Thirty per cent, by bill at two years;

Thirty per cent, by bill at three years: these bills bearing interest at ten per cent, per annum.

I have seen tens of thousands of sheep and cattle sold in this way, many of the buyers being men who had never even seen one of the animals they were bidding for, and who knew literally nothing about the management of flocks and herds; being tempted to make the purchase by the long credit given. But, strange to say, many old settlers were led, with their eyes open, into extensive purchases at most exorbitant rates, thinking that nothing could check the career of splendid prosperity upon which the Colony was then supposed to have entered. How dearly those parties have paid for their folly, the world generally, and their creditors in particular, well know. Besides the numerous public sales of stock all over the Colony, and the large amount of property that changed hands on those occasions, many important private sales took place about the same time. There was not a sheep, cow, or horse in the Colony, too old or too bad to find a purchaser! Any thing would sell, provided only that _time_ was given to find the money. Nothing could exceed the madness of the people, buying, selling, and exchanging accommodation-paper from end to end of the land. Then came the land-jobbers, a set of sharks who did great harm. It was a common practice with those jobbers, or rather robbers, to apply to the Surveyor-General's department, to have lots of land put up for sale, which they were aware that certain landed proprietors could never allow to fall into the hands of strangers, and then to go to the party whose estate the sale of the land in question would injure, and demand a bribe to stop their bidding against him. If this quietus was refused, these scamps would attend the sale, and bid the land up to some exorbitant price, knowing that their victim must be the buyer. Land once advertised by Government must be put up to auction; and the jobber's victim was obliged either to purchase, or to run the risk of having a stranger sit down as the proprietor of a few hundred acres in the midst of his thousands. Another cla.s.s of scamps used to attend land-sales, who would conspire to keep down the prices of lots they wanted, by not bidding against each other, and by playing various other tricks, to the detriment of the revenue. The Attorney-General got hold of half a dozen of those gentry in 1839, and prosecuted them for conspiracy. He obtained a verdict of guilty against them, but a.s.sented to their pet.i.tion for a new trial. Again they were convicted, and they were fined a hundred pounds each; the Court telling them, that the penalty would have been much heavier, had not the judge taken into consideration their humble pet.i.tion for mercy, and the heavy expenses they had incurred in standing two trials.

This system of selling by auction and by private sale, large herds of cattle and flocks of sheep at high prices, went on till some of the twelve-month's paper became due. Cash not being then forthcoming, renewals were asked for in many instances, which somewhat damped the ardour of speculation; but the wild career did not receive any very serious check, till the two-years' paper began to come into play. Very little cash could be got from the drawers, who were, in many cases, obliged to bring a large portion of their stock to the hammer, in order to meet their acceptances for thirty per cent, of the purchase money.

This alarmed people. The price of stock began to fall; and, long before the three-years' paper became due, ewes that had cost the buyers 3l. per head, could be got for 7s. 6d.

Thus, many a poor fellow, after labouring hard for three years to keep his flocks and their increase together, had to part with the whole, and still had not enough wherewith to satisfy his original creditors.

Hundreds of instances of this kind might be specified, did I feel at liberty to publish names.

As to the operation of the third main cause of the distress, the system that obtained, of giving long credit to purchasers of stock, the evils arising from this practice have been partly exposed in the foregoing remarks; but I will proceed to point out a few other evil consequences, as they occur to me. To begin with one that more than once came under my own notice; many persons of property, trusting to the long prices obtainable for stock of every description when sold on credit, and forgetting that there was absolutely no _cash price_ at the time, deemed themselves much richer men than they were in reality. Giving to their overseers the charge of their country residences, they took and furnished houses in Sydney for their families, set up their carriages, and commenced a style of living far beyond their means. This fact (the want of cash) came upon them the moment the first half-year's bills for rent, household supplies, &c., became due: these proved to the deluded settler, that, though he had flocks and herds, he had no money, nor could any be got, except at a sacrifice. To a man, they had to sell off and return to their estates, where dire necessity has since compelled them to remain, and where, I hope, renewed prosperity and common sense will induce them to stay.

Another evil caused by the long-credit system, was its inducing many persons to purchase stock for the purpose of raising money upon it. This practice was carried to a ruinous extent, and caused immense distress in this way. A hundred head of cattle might be parted with to day, by a needy settler, say, at 3l. per head, six months' credit; the seller took the buyer's note of hand for the purchase money, 300l., which was immediately taken to the bank, and discounted; and the settler returned to his farm, satisfied that he had made a good sale of his beasts. The buyer, having no use for the cattle, re-sold them, taking the second buyer's note for the money, which, like that of the first, went at once to the bank. This transaction was frequently repeated six or eight times, before the cattle found a _bona fide_ purchaser; and it was no uncommon thing, to find paper in the market to the amount of 1800l. or 2000l., the only representative for which was the hundred head of cattle originally sold by the settler; the whole of the parties concerned being, with the exception of the first seller and the last buyer, mere men of straw. When the six months expired, not a single bill of the six or eight negotiated, was taken up, excepting, perhaps, the last one: all the others had to be renewed; and it was the forcing the payment of such bills, that ruined so many people, and ultimately shook the credit of every bank in Australia.

The credit system also led many mercantile men into speculations which they never would have entered into under a wholesome system of trade.

From these many serious losses resulted, which have led to ruinous failures. Any man with a hundred pounds in his pocket, could get credit for a thousand; and numbers of adventurers of all descriptions, taking advantage of the times, opened stylish shops well-filled with goods bought on credit, carried on a flourishing trade till within a few days of their bills falling due, and then decamped, leaving their unfortunate and silly creditors to get paid from the wreck of the stock left in the shop. I knew an auctioneer who played this nefarious trick, leaving his creditors _minus_ the enormous sum of 70,000l. He did not, however, long retain his ill-gotten wealth: how he got rid of it, I do not know; but I found him two years ago in Singapore, where he kept a small grog-shop, and lived in great wretchedness; and I have since met with him knocking about the streets of Macao, a disgrace to his country in a foreign settlement. The credit system ruined two thirds of the respectable auctioneers in Sydney, and upset the Australian Auction Company, absorbing every shilling of its paid-up capital.

In addition to the evils inflicted on this Colony by these main causes, great losses were sustained by settlers through their becoming shippers of their own wool. At the time I speak of, wool was worth, in Sydney, from 2s. 1d. to 2s. 2d. per pound, and, in England, some 6d. or 8d.

more. These high rates would not satisfy some settlers, who foolishly took an advance upon their clips, letting them go home on their own account, and at the risk of the agents of the parties who advanced the money in Sydney. In the meantime, wool fell in the English markets to 1s. and 15d. per pound. The nett proceeds of the shipment did not nearly cover the advance made; and the hapless shipper, already in debt to his agent for supplies, and without a penny of cash at his command, was called upon to make good the difference, which he was unable to do. His agent, pressed by others, must press him; his flocks are brought to the hammer, and sold at the now ruinous current prices; and he becomes a bankrupt. Dozens of cases like this, occurred during the late wretched times.

I come now to the consideration of the bad seasons of 1838-39 and 1839-40. While I maintain that they were far from being the sole, or even the chief cause of distress, I allow that they added to it very materially. To shew that they were not the sole cause, I may mention, that, among my own personal friends in the Colony, not one who avoided speculation and putting his name on paper, has failed; while those who followed the stream have sunk, every one of them. During those years, every thing the unfortunate grazier had to sell, was cheap beyond all precedent; while every article he was compelled to purchase, was very dear. Tea, owing to the China war, rose from 5l. to 15l. per half-_pecul_ chest of hyson skin. Flour of the very coa.r.s.est description could not be had under from 30l. to 35l. per ton of two thousand pounds weight,--a colonial cheat, calling two thousand pounds a ton! Sugar and other necessaries were equally high; and many a poor settler who had never refused his hard-worked servants their tea, sugar, and tobacco, was compelled to stop those indulgences.

To the working-cla.s.ses in Sydney and other towns, the bad seasons were ruinous. Provisions were so dear, that many a father of a family found his earnings far from sufficient to provide food for his wife and children. Building was almost entirely put a stop to; and thus, hundreds of industrious men were thrown out of employment. To so serious an extent did this distress reach, that Government was called upon to afford pecuniary relief to the starving poor; a circ.u.mstance altogether unprecedented in Australian history.

So low had these evils sunk the Colony and all its inhabitants, that failures of merchants and settlers continued to be of almost daily occurrence up to the end of the year 1843. No one durst push his neighbour for payment of debt: were such a thing attempted, an immediate surrender of his affairs to the official trustee of the Insolvent Court, was the consequence. Several of the first and oldest merchants in the Colony have sunk under the long-continued pressure; and, at the date of the last accounts, more failures were looked for. These, however, were expected as the result of old causes, not of new or recent transactions.

Upon the whole, I am disposed to think, that Australia has seen its darkest day, and that things are likely soon to improve, if, indeed, they have not already mended. The price of stock was looking up; and ewes that had actually been sold as low as 9d. each, were worth 7s. 6d.

Men of capital lately arrived from England with ready money, had commenced purchasing land and stock; and their operations had given an impetus to affairs in general, that could not fail to be beneficial.

CHAPTER XIII.

NEW SOUTH WALES.

ELEMENTS OF PROSPERITY STILL EXISTING--HINTS TO THE COLONISTS--FUTURE PROSPECTS.

Notwithstanding the terrible shock from which Australia has been suffering ever since 1839, I still retain a high opinion of the Colony as an advantageous field for the employment of the spare capital of the mother country. The elements of prosperity still exist, and require only a little nursing in order to effect its recovery from the recent depression. The emigrant with a capital of three or four thousand pounds, must not, indeed, expect to make a fortune in a few years; but he may with perfect confidence look to make himself an independent man, at a much more rapid rate than he could by means of double that sum in England. If he is prudent, nurses his capital, sticks to his business as a settler, avoids _tempting_ bargains of things he has no use for, and, above all, refrains from obliging his neighbours with the occasional loan of his name to a bill, I see not what can by possibility prevent his succeeding in such a country, even allowing that every third season should prove one of drought. To the industrious farmer with a small capital of 500l. or 1000l., New South Wales offers a fine field: he can obtain a hundred acres of the finest arable land in the world on a clearing-lease, with two years free for the clearing, and three or five years more on a moderate rent. A capital even of 500l. will enable him to fence his land, build himself a _bush_-house and out-offices, and maintain his family for two years; by which time it will be hard indeed, if he has not land enough under crop to return him something handsome. I have known many settlers of this kind thrive, and many others "go to the wall:" the former had a small capital to start with, while the latter commenced upon credit for the very bread required for their families; a plan I never knew to succeed.

Let but the settler stick to his business; the merchant be content with smaller profits than used to satisfy him, and cease giving long credit to all and everybody; let the banker be less grasping, and not quite so hard a creditor when he finds one of his customers in difficulties or reverses; let every one avoid speculations out of his strict line of business, and beware of accommodation-paper; and let the lower and middle cla.s.ses avoid the public-house; and there is nothing to fear for Australia. It has had a severe lesson administered to it, that ought to be a warning to all its inhabitants for the future. I have no hesitation in saying, that nine-tenths of the evils from which the Colonists have suffered of late, have arisen from their own imprudence, and that these may be avoided in future by common caution, in spite of dry seasons and occasional failures of crops.

Now that colonization is extending up the coast from Sydney northwards, and the inhabited parts of the Colony already approach the tropic of Capricorn, New South Wales ought, in a few years, to be a rice and sugar-growing country. The soil on the banks of the rivers in the neighbourhood of Moreton Bay, is, from all accounts, equal to any thing hitherto known in the Colony; and the climate is very highly spoken of.

Should the winter there prove too long or too severe for sugar-growing, (I do not see why it should be so,) parties anxious to try the culture of the cane as a means of making money, must in that case just move a little further north. There is an extensive field to explore, before they reach Torres' Straits.

That New South Wales will become an extensive wine-growing country, I conceive there is no room to doubt. Its vineyards are magnificent, in every sense of the word. I have visited several of them, and was struck with the abundance and variety of their produce. Two proprietors of my acquaintance have been for years in the practice of making wine of different sorts, but princ.i.p.ally of the lighter kinds resembling the Rhenish. I can vouch for their being very palatable, particularly during the summer months. One of the gentlemen alluded to has also made very good port wine and brandy.

The greatest drawback on the commerce of New South Wales, is the deficiency of exports, the balance of trade being greatly against the Colony. Its wool and oil are what merchants have hitherto princ.i.p.ally depended upon, though other exports are now coming into play; viz.

cedar-timber, hides, tallow, and salt provisions. Still, I do not think that, even with these additions, the merchants of the Colony can manage to make their exports equal in value to their imports; and were it not for the very considerable sums drawn for on the Home Government, by the military department, for the pay and provisions of the troops, necessity would compel the merchants of England to reduce their shipments to Australia. The great fall in the price of the princ.i.p.al colonial staple, wool, has added very materially to the difficulties arising out of this state of affairs, by reducing the value of remittances made in that article to one half of what it used to be. The quant.i.ty of wool increases, it is true, from year to year, but not to such an extent as to counterbalance the fall in price; and it must be borne in mind, that, as fast as the wool increases, so does the population, and consequently the amount of imports in the shape of supplies, which have all to be remitted for. Since the opening of the coast of China to the commerce of the world, (the result of our late struggle with that country,--a struggle so much condemned by those who were ignorant of the merits of the case,) the merchants of Sydney seem to have entertained the idea, that their trade will benefit by the change. No one would rejoice more than myself at their antic.i.p.ations proving correct; but I confess my judgment differs from theirs; and if we may judge by the result of their trial shipments, which arrived prior to my leaving China, it is to be feared they will find, to their cost, that they have reckoned without their host. The Sydney merchants, from what I have heard, expect to find in China a market for horses, cattle, and sheep, coa.r.s.e woollens, wine, and salt provisions. The first three have been tried, and the experiment has proved an utter failure: the horses were sent to Calcutta, not a purchaser being found for one of them in Hong Kong. Cattle are out of the question: they cannot be transported five thousand miles to undersell the Chinese butcher, who gives fifteen pounds of good beef for a dollar--about 3-1/2d. per pound. This price, the Sydney speculator cannot compete with, particularly as his beasts would certainly land in poor condition after so long a voyage, and either put him to the expense of fattening them, or compel him to sell at the low price of lean cattle. Sheep have also been tried by several ship-masters, and did not answer: the last lot that came, were slaughtered and sold in the market, the only way in which they could be got rid of, and which would not answer the purpose of a large importer.

For coa.r.s.e woollens, a market may certainly be found in China; but whether a profitable one, or not, to the Australian manufacturer, is, in my opinion, somewhat doubtful. Labour is so much cheaper in Britain than it is in Australia, that, I fear, the Sydney manufacturer would have but a poor chance, when his goods came into compet.i.tion with those of Manchester, either in the Chinese or in any other market. Whatever kinds of goods may be required on the coast of China, will soon be supplied from Manchester and Glasgow at the lowest possible figure, the object of the manufacturers of those places being, I presume, a large trade with moderate profits; so moderate, indeed, as to leave the Sydney manufacturer no chance of competing with the means at the command of the British manufacturer. Australian wool, like Indian cotton, may be taken to England, be manufactured there, and sent out and sold in China, or anywhere else, for less money than it would cost the Sydney capitalist to produce the manufactured article. As to wine, it will be a long time before New South Wales has much to export; and the limited European population of China will not consume a sufficient quant.i.ty to be of importance to the Australian vine-grower. The Chinese cannot be counted upon as purchasers: they are not wine-drinkers, generally speaking; and the little they do consume, is manufactured to suit their own palates, in China.

For salt provisions, there is a considerable demand in China, among the European shipping that visit its ports: they must, however, be cheaper in Sydney than they were in my time, to answer the purpose of even a remittance. The Americans bring to China excellent beef and pork, which they sell at ten and twelve dollars (about 42s. to 54s.) per barrel of two hundred pounds weight. If these prices will remunerate the Sydney shipper, he may try his luck as soon as he likes; but he must not send an inferior article: if he does, he will sink his capital. Cedar-timber has been tried recently, and has answered very well to a small extent: this, however, will last only till the town of Victoria on the island of Hong-Kong is completely built.

By every fresh outlet for surplus stock that can be pointed out to the Australian grazier, we shall be rendering him a substantial service. Sir Robert Peel's new tariff will enable him to dispose of many a spare fat bullock. Of this opening he has already taken advantage, by sending trial shipments of salt beef to England.