The _Australian Insurance Banking Record_ informs me that there are no
less than 24 joint-stock banking companies, with 750 branches doing
business in Australia. They all pay dividends of from 6 to 18 per cent.
to their shareholders, besides putting handsome sums every year to their
reserve funds, so that banking business is fairly profitable here. The
existence and prosperity of so many banks in a community which, all told,
is considerably smaller than the population of London, is chiefly due to
the wealth of the small number of people who form it, and also to the
wider range of business which the banks undertake. Nearly everybody who
is worth £100 has a banking account, and most people who have an account
have overdrafts, which are given for the most part on purely personal
security. The banks also advance freely on growing crops, wool on the
sheep's back, and all kinds of intangible security. Many of the largest
merchants are to all intents and purposes mere bank-agents. It is quite a
common thing for ordinary working-men to keep bank accounts; and all
farmers, even the smallest, are obliged to keep them; for in the country
specie payments are almost unknown, and the smallest sums are paid by
cheque. Even in the towns, residents usually pay any sum over a pound by
cheque. Although this practice has opened the door to a good deal of
fraud, its convenience is obvious. You need never keep more than a few
shillings in your pocket, and your bank keeps all your accounts for you.
In a community in which every class is largely dependent upon his
goodwill, the banker occupies the highest social position, almost
irrespective of his merits. It is this excessive dependence upon the
banks which largely accounts for the excessive ups and downs of colonial
life. In times when money is easy the banks almost force it upon their
customers. When it is tight, many people who are really solvent are
forced into the _Gazette_, and a panic ensues, from which it takes the
country some time to recover.
The tendency to merge large firms into limited liability companies, which
has extended lately from America to England, has also been felt in
Australia, though not to the same extent as in New Zealand. In certain
classes of business these come into competition with the smaller banks,
but each, as a rule, runs hand in glove with a large bank, undertaking
certain classes of loans and supplementing the bank's business. They buy
wool and wheat freely in Melbourne, hold auction sales there, sell on
commission in England, advance upon wool on the sheep's back and standing
crops onwards; in short, merit their usual description of loan,
mercantile, and agency houses. Mortgage and land investment companies are
another class which has been springing up of late. One company has been
started professedly to deal solely with wheat: several already exist
which make wool their only concern. Besides these, there are the usual
run of mining companies, which spring up epidemically and mostly have
their headquarters in Victoria. It is needless to say, that in these
companies it is a case of neck or nothing.
Land is naturally the safest investment of any that offer themselves in
the colonies. Although every ten years or so there comes to each colony a
period of intense speculation in land, with a consequent reaction, it is
a generally accepted maxim, that 'you cannot go far wrong in buying
land.' There is always the chance of making 50 to 100 per cent. in the
year by a land purchase, and at the worst you will get 10 to 20 per cent.
per annum, if you can only afford to tide over one, or at most two bad
years.
On first-class mortgages the rate of interest varies from 6 1/2 to 8 per
cent. for large amounts. For small amounts 8 per cent. is always
obtainable by a man who keeps his eyes open. But, beyond this absolutely
secure class of investments, one thousand-and-one small chances of making
large profits with little risk occur to every man who has got a few
hundreds; and if he fails to turn them to account he will have nothing
but himself to blame.
In the early days there was of course no distinction between wholesale
and retail business, and in country towns the largest firms still keep
stores where you can buy sixpennyworth of anything you want. Even in the
towns the distinction is not firmly established, and many of the
wealthiest importers still keep shops. Nor are the trades specialized to
anything like the same extent as at home; though, in wholesale trade,
they are becoming more so every day. Nearly the whole of the
extra-Australian trade is still with England--chiefly London--though
there is a small import trade with America and China, and export to India
and the Cape. The French and Germans are both making strenuous efforts to
establish a market here, and the Germans especially are succeeding. A
great deal of business has been done of late by agents working on
commission for English manufacturers; but most of the larger importers
have their buyers in England. The tendency, however, is towards buying in
Australia, although it is opposed by the large wholesale importers who
are injured by closer connection between manufacturers and small buyers.
If, on the one hand, there are fewer of those old-established firms in
which strict traditions of honour descend from generation to generation,
so, on the other hand, the smaller size of the towns gives less scope for
barefaced swindlers. And thus, if the standard of commercial morality is
lower here than at home, people are not taken in so easily, or to so
great an extent. Everyone is expected to be more or less of a business
man, and is looked upon as a blockhead and deserving to be cheated, if he
does not understand and allow for the tricks of the trade. In Melbourne
the heavy protectionist tariff has brought about an almost universal
practice of presenting the customs with false invoices so skilfully
concocted as to make detection impossible. Within my knowledge this
practice has been resorted to by firms of the highest standing. Sharp
practice amongst respectable firms is also very common, and verbal
agreements are less trustworthy than in England. You are expected to be
on your guard against being 'taken in;' and if you are taken in, no one
has any compassion for you, the general opinion being that a man who
trusts to anything less than the plainest black-and-white is a fool.
Liberality to _employés_ and in the details of business is little known
or appreciated. Exactly contrary to the prevalent idea in America, the
Australian merchant is most averse to casting bread on the waters with a
view to its return after many days. He distrusts courtesy and liberality
as cloaks for the knave, or as the appurtenances of the fool. Loyalty is
a phrase little understood, and the merchant leaves as little to his
clerks' honesty or honour as he can possibly help. In business he holds
that 'Every man's hand is against his neighbour, and his neighbour's
against him;' and he pushes the aphorism to its fullest logical
conclusion, i.e., not merely to 'Believe every man to be a knave until
you find he is honest,' but 'Believe that when a man is honest it is
merely the more successfully to carry out some rascality.'
The old-fashioned English prejudice against bankruptcy has been improved
out of existence by the speculative nature of all business, and the
consequent frequency of insolvencies. Some of the largest merchants have
'been through the Court,' as it is termed, more than once; and provided
there has been no open swindle in the case, no opprobium attaches. Even
when there has been swindling, it is soon forgiven and forgotten. A man
who has been caught swindling is denounced at the time with an
exaggerated ardour which would make a stranger think that swindles were
almost as rare as the cases in which they are discovered; but it is only
just to recognise that the exposed swindler has a fair chance given him
of retrieving his reputation, and perhaps of setting himself up again.
The fact is, that so much sharp practice goes on, that the discovered
swindler is rarely a sinner above his neighbours: he has simply had the
bad luck to be found out. If half the stories one hears are true, half
the business people in the colonies must be more or less swindlers in
small matters. I don't mean that they commit legal swindles, but merely
what may be called dirty tricks. On the other hand, I know many business
men in whose probity I could put full confidence. But you require to live
in a place some time, and must probably buy your experience pretty
dearly, before you find these out. And even they in many trades cannot
help contamination. It is very difficult to mix thoroughly in business
without dirtying your hands; it requires no ordinary moral courage to
keep them clean when there is so much filthy lucre about. A man who is
determined never to diverge from the strict path of honour finds himself
of necessity at a disadvantage in the commercial maze, and the best thing
he can do is never to go into it. His sense of what is right cannot but
be dulled by the continual grating of petty trickery. He is led almost
before he knows it into things from which he recoils with disgust,
perhaps too late to prevent them, and he has continually to be on the
watch for and to combat the trickery of others. I cannot say that,
generally speaking, I have much sympathy with the somewhat smug
self-righteousness of Young Men's Christian Associations, but I must say
that they have done a great deal of good in putting a leaven of honesty
into the commercial lump.
The way in which a man changes his trade and occupation is remarkable.
One year he is a wine-merchant; the next he deals in soft goods; and the
year after he becomes an auctioneer. The consequence of this is, that,
although colonists acquire a peculiar aptitude for turning their hand to
anything, and a great deal of general commercial knowledge, that
knowledge is for the most part very superficial. This accounts for the
phenomenal success which a newcomer who is a specialist occasionally
meets with in a line of business in which he is an expert, and also for
the failure which often attends the efforts of competent specialists, who
become discredited because they are not able to do something properly,
which in England would not be considered to come within their province.
To a man coming here to establish himself in any business I would always
give the advice to take a subordinate position for a year in a similar
business already established. This will give him what is called 'colonial
experience,' for want of which many an able man fails at the threshold.
Amongst the peculiarities of colonial trade is a strong preference for
local manufactures, with the exception of wine. A large manufacturer of
agricultural machinery, who has just been making a tour of the colonies,
tells me that he finds merchants actually prefer an inferior and dearer
article locally made, if it appears at all equal to the English one in
appearance. In a certain measure I believe this to be true. It is not
merely a patriotic or protective feeling of sentiment, but is to a great
extent due to the untrustworthiness of European manufacturers, who
constantly send out articles inferior to those ordered. The French in
particular sin in this respect. The Americans seem to be most to be
relied upon. Owing partly to the duty on wool, and to the small number of
articles which can be exported to America, there is not nearly so much
trade with the United States as might be expected. If freights were
lower, or our social relations with America closer, there would certainly
be many more American manufactures in use than there are now.
Generally speaking, it may be said that trade is far more speculative and
profits far larger than in Europe. Capital requires and obtains at least
half as much again in interest. The openings for profitable speculation
are greater. In squatting, the losses are occasionally very large; but
during a good season the gains are beyond all English conception, if the
rate of increase of the flock, which is sometimes from 100 to 120 per
cent., be taken into consideration. You hear people say that the day of
the squatter is coming to an end in Australia, and that money can no
longer be profitably invested in sheep-runs. If this be so, how is it
that nearly every Melbourne merchant is also an owner of stations? That
sheep-farming can no longer be carried on with so small a capital as in
the early days may be true; but if a man has the experience, and can
endure the hardships of taking up new country, he has still every
prospect of success. It is in the towns only that the acquisition of
wealth is becoming more difficult; but it may be laid down as a general
rule, that in town or country any man with over £5,000 will, if he goes
the right way to work and has ordinary luck, multiply his capital by
twelve in less than a score of years; and that the impecunious man can at
least find more elbow-room than at home. Clerks are said to be a drug in
the market; but that is a mere _farçon de parler_, expressing the fact
that they are the worst-paid class in Australia. It does not prevent them
from getting better pay for less work than they do in England.
In the professions, as may be imagined, first-class men are rare. When we
get them, it is either on account of their health or their habits. A
first-rate man can do better in England than here, not only because the
field is wider, but because the standard of comparison is higher. Even a
second-class man should do better at home in the long-run, though for
immediate results there is no place like Australia. But the man who will
do well to emigrate is he who is just above the ordinary rank and
file--the _junior optimè_ of his profession. The rank and file will
probably do better out here, but not so much better as to compensate them
for the change of scene and life; and the Australian public will take
little account of a man who cannot show ability in some direction. For
specialists there is not yet much scope. Our social organism has not yet
become sufficiently heterogeneous, as the evolutionists would say, though
it is gradually progressing every day.
Of all the professions, medicine certainly is the best remunerated. It is
not merely that a certain Melbourne surgeon--a man, however, who would
have made his mark in London--is making from £8,000 to £10,000 a Year,
and several other leading doctors from £4,000 to £6,000; but that the
general average income is about £2,000 a year, and an unknown M.R.C.S.
can within a month of his landing walk into a practice of £600 for the
asking. Exceptions of course there are to the prevailing high rate of
income; but they proceed mostly, not from incapacity--for there is plenty
of that at £2,000 a year and of drunkenness also--but from an
unwillingness to begin with the hardships of a bush life. To start well
from the first in town is possible, as has been proved, but only under
exceptional conditions; whereas the most mediocre medico, with a mere
license from Apothecaries' Hall, can land himself in a good country
practice. Provided he can stand that life for three or four years without
becoming a drunkard or breaking down in health, his fortune is made. At
the end of that time he either takes an opportunity to buy a town
practice for a small sum, which, if he has either friends or ability, is
his best course, or if he has neither, he stays up in the country, and
equally obtains a fortune, though with much harder work. Bush fees are
large, but bush work is hard. The bush doctor may at any moment be called
upon to ride fifty miles to see a patient. In town he would only get a
half-guinea fee, or in Adelaide only five shillings; but the circle is
circumscribed, and it is astonishing how many five shillings can be
obtained in a day.
In Melbourne and Sydney the bar still exists as a distinct institution.
In Adelaide, solicitors, attorneys, conveyancers, proctors, barristers,
are all united, and this reform, which works admirably, will probably
soon be extended to the other colonies. What generally happens is, that
one man with a penchant for the forum goes into partnership with another
whose forte lies in the office; and thus, though all lawyers meet on an
equality, the two branches of the profession practically remain apart.
But the new régime offers great advantages to juniors, who are thus no
longer dependent upon attorneys, but are brought face to face with their
clients. The latter, in whose interest the reform was chiefly made, have
thus, also, far more freedom of choice as regards their advocates.
Comparatively easy as it is for a junior to get a fair practice, the bar
has too few prizes to make it worth the while of the best men to stay out
in Melbourne and Sydney. There are a few exceptions, but very few, who make
over £4,000 a year, and in New South Wales the Chief Justice only gets
£3,000 a year. Hence a marked weakness in the colonial bench of every
colony, except Victoria, where the salaries are higher. Here and there
you see a first-rate judge, but for the most part judges are
ex-attorney-generals of the administration which happened to be in office
when the judgeships fell vacant. Political distinction has become a
_sine quâ non_ for a candidate for the bench. The leading counsel often
would not accept the office if it were offered them, and thus the
just-above-the-averages form the majority of judges.
The worst paid of all professions are the clergy, and not only are they
the worst paid, but the hardest worked. The bishops get from £800 to
£2,000 a year, but there are very few clergy whose stipends exceed £600,
and the majority live and die without getting any higher than the £350 to
£400 stage. Nor have they here the social compensation which they enjoy
in England. There is no Established Church, and their position is not
many degrees superior to that of the ministers of other denominations.
The latter, whose wants are naturally less, are quite as well, and on the
whole probably better, paid. If they have any ability, £500 to £700 is
easily within their reach, and one or two distinguished preachers get as
much as £1,500 to £2,000.