The charter of the Van Diemen's Land Bank having expired, it became a
joint stock company, and enlarged its capital to £50,000; ten per cent.
being charged upon discounts. The Tasmanian was a private bank, of which
the Messrs. Gellibrand were proprietors. The limited business carried
large profits, and the purchase of bills, not passed in the regular
course of discount, then, as afterwards, yielded large returns. The
Derwent, established chiefly by persons connected with the government,
was opened for business on 1st January, 1828, with a capital of £20,000.
At the same time, the Cornwall Bank, with £10,000, was established by
the merchants of Launceston; and the facility of monetary transactions
increased on every side. The arrival of considerable investments from
India, brought rupees into extensive circulation, and they formed a
great proportion of the current coin.
The large imports of English goods, and the increase of promissory
notes, alarmed several persons connected with trade. An advertisement,
signed John Dunn, offered a quantity of shares in the Derwent on liberal
terms. At a meeting of the shareholders, Mr. Dunn maintained that the
liabilities of the community were dangerous, and twenty times greater
than the circulating medium. It was replied, that bills were chiefly
multiplied by re-sales, and that the cash of the consumer would be
transmitted through the whole mercantile chain.
The Van Diemen's Land Bank discovered a singular fraud by the cashier in
1828. Amongst the large accounts, which were unlikely to be drawn, he
debited the cash which he employed as a private discounter of bills. The
sudden presentation of an unexpected draft led to an examination, and
£2,000 were found deficient. The money was refunded, except a trifling
amount, and prosecution waved.
The interest of the officers of the government in the Derwent Bank
occasioned complaint. The risks, liabilities, and antipathies of trade,
were deemed unsuited to their duties. At the governor's request, the
relation was disguised, but it was not dissolved.
The state of trade at this time wore a deceptive aspect. Dr. Henderson
reckoned the actual profit of the colony at 1-1/2 per cent., while Mr.
Prinsep, a barrister, of Calcutta, described every branch of business as
a path to opulence. In 1829, a merchant sold £1,500 worth of goods at an
advance of 50 per cent., and a credit over three years bearing 15 per
cent., amounting to £2,250 in all. A glut sometimes reduced the value of
merchandise below the London price.
"See, how I am changed!" said Mr. Prinsep. "Amongst all the beauties, I
am beginning to think none so beautiful as the interests of capital.
Interests alone on mortgage, with the very best securities, is 15 or 20
per cent. Invest your money in wool, and it brings you a return of 50
per cent. per annum: in the whale-fishery, 100 per cent. Bank dividends
now paid are 16 per cent. I only brought down a broken-winded Arab or
two, and their hire pays my current expenses. Money invested in land
will be ten-fold its original value in fifteen years. £200 will purchase
a noble property here; £1,000 will buy a fine, healthy, and beautiful
estate--two hundred of them already in cultivation. The whole colony is
on the advance, and its resources remain to be developed." Such was the
bright picture published in Calcutta. The influx of speculators
postponed the crisis, and prolonged the delusion.[158]
The increase of capital, and the opening of cash credits, facilitated
the operations of the settlers, but tempted many to ruin. The government
rewarded the rapid improvement of estates, the erection of substantial
dwellings, farm buildings, and fences, by grants of land in extension.
To secure the proffered boon the settlers accepted the assistance of
money-lenders, whose claims at length absorbed the proceeds of their
toil. During a progress through the colony, the governor visited many
establishments, and distinguished the enterprising agriculturist with
special favor. On his return to head-quarters he expressed the pleasure
his inspection had afforded; and noticed in a public order Mr. Gatenby,
of the Isis, as a "good old English yeoman," and an example of
enterprise and skill. Well assured that his Majesty was desirous that
the character of a plain, upright farmer, should meet with encouragement
and reward, he added to this settler's grant 1,000 acres.[159] The
"Gatenby farmers" were henceforth noted as a favored class; and many,
anxious for the same recompense, borrowed, enclosed and improved, until
they had not a rood of land to call their own.
The most distinguished money-lender was Sheriff Ferreday, whose ordinary
charge was 35 per cent., or less with ample security. After a few years
(1834) he returned to Europe, having realised £20,000 by usury. At his
death, he devised a portion of his wealth to Oxford, to found a
scholarship. He suffered much vituperation, probably with little
comparative justice. "His bible," said Mr. Gellibrand, "is his bill
book, and his gold his god"--a quotation from Burke, highly relished at
the time.
The treasury was again robbed in 1832. It was observed the office papers
were deranged: constables were stationed to watch, and a sentinel was
placed at the door. The sudden examination of the chest by the governor
discovered a more serious transaction. It appeared, capital had been
borrowed from the chest without authority, to the amount of some
thousands; the money was, however, restored. No public care could
reclaim these funds from their tendency to escape, and they were not
deemed sure until out of the custody of the government.
The secretary of state directed the public cash to be deposited with the
banks. The treasurer was not authorised to retain more than £10,000 of
paper, and the Van Diemen's Land and Derwent establishments each
received charge of £10,000 cash. During six years, the revenue had risen
from £30,000 to £60,000: notwithstanding a very liberal official
expenditure, the surplus funds (1831) amounted to nearly £40,000.
The interior communication was facilitated both by the business of the
police and the cheap labor in the hands of the crown. The post of
Sorell's time was a private speculation, conveyed on foot, afterwards on
horseback. On the 19th June, 1832, a "cheap and expeditious conveyance,
to and from Launceston," was announced. The owner, Mr. J. E. Cox, drove
tandem, at the rate of forty miles a-day: only one passenger was
accommodated, at a fare of £5. The practicability of the journey was
then the subject of considerable betting.[160]
In 1827, and during two following seasons, New South Wales suffered a
serious drought, which increased in severity. Rivers were exhausted, and
their beds left dry. Not only the want of rain was felt, but a withering
blight, travelling in a defined current over the cultivated districts,
cut off their harvests. In two years the cultivation of wheat in Van
Diemen's Land increased from twenty to thirty thousand acres, and the
average price of wheat at Hobart Town was 8s. per bushel. This
stimulated further production, and tended to avert from Van Diemen's
Land the distress, which over speculation and scarcity produced in New
South Wales.
This dearth was followed by two plentiful harvests (1831), and a
depression of price. The farmers of New South Wales entreated General
Darling to establish a corn law, to check importation. In declining the
project, he attributed the successful competition of this country to the
superiority of its wheat and facility of transit; and hinted that the
elder colony was indebted to foreign supplies for its subsistence.
FOOTNOTES:
[Footnote 157: _Observations on the Colonies of New South Wales and Van
Diemen's Land._ By John Henderson. Calcutta, 1832. p. 5.]
[Footnote 158: _Journal of a Voyage to Van Diemen's Land_, p. 108.]
[Footnote 159: _Gazette_, March, 1828.]
[Footnote 160: Until 1832, the post was managed by Mr. Collicott, as a
private speculation. There were nine post stations. The number of
newspapers conveyed by post in 1832, was 13,000; in 1833, 102,
400.--_Montagu's Statistics._]