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SECTION VII

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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 1½ 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:

[157] Observations on the Colonies of New South Wales and Van Diemen's Land. By John Henderson. Calcutta, 1832. p. 5.

[158] Journal of a Voyage to Van Diemen's Land, p. 108.

[159] Gazette, March, 1828.

[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.