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I mean men in the highest stations) ; population flowing
in and land selling with fearful rapidity and a rapidity
that the Commissioners were pledged to meet. I was


their representative, a Commissioner under the same
sign manual like themselves, and bound before God and
man to maintain in good faith their engagements. I
really laboured most continually and anxiously for
economy, and Mr. Hall and I nearly destroyed ourselves
with unceasing labour."

It was anticipated by many that after he had defended
his actions "at home," Colonel Gawler would be re-
instated in his office in South Australia. But this was
not to be, and he remained an injured and unjustly
treated man.

Of the immediate circumstances connected with his
recall, and of the action of the Imperial Government in
averting the utter ruin of the colony, threatened by
their returning the bills drawn upon the Commissioners
and the Lords of the Treasury dishonoured, we shall
write more fully in the next chapter.




MAY 10TH, 1841 OCTOBER 26-ra, 1845.

The Financial Crisis. Views of Mr. G. F. Angas thereon. South
Australia a Crown Colony. The Governor and the Imperial
Government. Errors of the Commissioners. Ketrenchment.
Unemployed Immigrants. Agitation. Reports of Select Com-
mittee of House of Commons. A Loan guaranteed. Colonial
Creditors. Outrages by Natives. Mr. E. J. Eyre. Native
Schools. A Tide of Commercial Misfortune. Universal Bank-
ruptcy. Its Causes. Governor Grey's Bills dishonoured.
Serious Consequences. New Waste Lands Act. Act for
Better Government of South Australia. Signs of Improvement.
Ridley's Reaping Machine. Mineral Wealth. Mr. Menge".
Kapunda Copper Mine. Explorations. Captain Sturt. Mr.
Drake. Ecclesiastical Affairs. Convictism. Bush Fires.
Burra-Burra Copper Mine. Port Adelaide a Free Port. Popu-
larity of Sir George Grey. Eulogies.

WHEN it became known to the friends of South
Australia in England that the bills drawn by Colonel
Gawler had been dishonoured, the greatest consterna-
tion prevailed. Euin, irretrievable ruin as it seemed,
stared the insolvent colony in the face. The Com-
missioners and the directors of the South Australian
Company were alike terror-stricken. The blow had
fallen with sudden and startling force.

One of the first to take action on behalf of the
colony was Mr. G. F. Angas, the chairman of the
South Australian Company, who wrote to Lord John


Russell, Secretary for the Colonies, a stirring letter, from
which the following is an extract :

"October 24, 1840.

" . . . It is impossible for me to feel otherwise than
greatly alarmed at the present dangerous position of
the new colony, and the destruction that awaits it when
the dishonoured drafts of the Governor, now under
protest for non-acceptance, shall reach Adelaide in
utter disgrace, with twenty per cent, damages for non-
payment. From whatever causes, that colony is at
this moment in a state of advancement and complete-
ness in the fourth year of its existence, without a
parallel in the history of the Empire, and if it should
not continue to progress, the cause of its obstruction
cannot be chargeable upon its inhabitants, or upon the
professed friends of the colony in this country, who
have nobly done their duty in the furtherance of this
important experiment in colonization. Neither in the
measures of the Government nor in the application of
the finances have they had any power whatever, and
they cannot understand how it is that with an unap-
propriated emigration fund of about 80,000, and the
power given to Her Majesty's Commissioners by the
South Australian Act to raise a loan of 200,000, of
which 120,000 remain untouched, that the Governor's
drafts should have been refused acceptance. Thus, in
an instant, the public credit of the colony has been
destroyed, and, if not restored by a timely interposition
of the Government, must end in anarchy, confusion,
and ruin.

" Most happily, the interval between the first pre-
sentation of the drafts and their maturity will afford
time for your lordship's intervention, and the awful
consequences of a general bankruptcy may be averted.
Here is a colony, raised up within four years without
trouble or expense to the mother country, with a
population of 16,000 persons, whose seaports have,
during the past few years, admitted about two hundred
merchant ships, and where more than a million of British


capital has been embarked, even at a distance of 14,000
miles. The celebrated colony of Pennsylvania, at one-
third the distance, could not in seven years number
half the population, or a fourth of its commerce."

This, and similar appeals, moved the Government to
action. It was decided to guarantee a loan, and to
recommend its adoption by Parliament, and orders were
given to the Commissioners to make arrangements to
meet the dishonoured drafts. A parliamentary inquiry
upon the whole of the affairs of South Australia was
to follow.

Meanwhile, punishment was to be meted out to the
Governor whose lavish expenditure, it was said, had
brought about all the mischief, and it was done in a
manner as unpleasant as it was unjust.

Colonel Gawler's recall, dated Downing Street,
December 26, 1840, and signed by the Secretary of
State for the Colonies, was in these terms :

"In consequence of the reports which have been
made to her Majesty's Government by the Colonization
Commissioners for South Australia, respecting the
amount of the bills which you have drawn on the
Commissioners in excess of the authority which you had
received from them for that purpose, it has become
my unwelcome duty to advise her Majesty to relieve
you from the office of Governor and her Majesty's
Resident Commissioner in that province. The Queen,
having been pleased to approve of that advice, has
appointed as your successor Captain Grey, who will
proceed to South Australia in the vessel that carries
this despatch."

The first official intimation received by Colonel
Gawler of any direct censure of his policy by the Com-
missioners, or of dissatisfaction on the part of the
Colonial Office, was this curt recall, and the appearance
of Captain Grey at Government House as his successor !

Upon the appointment of Captain Grey, the manage-
ment of the colony by the South Australian Com-
missioners in London practically ceased, the home
Government taking it entirely into their own hands.


Apart from the objectionable manner in which it
was done, it is questionable whether any better man
could possibly have been selected than Captain Grey.
He was the son of Colonel Grey, killed at the taking
of Badajoz, and was born in Lisbon, Portugal, on the
14th of April, 1812. Educated at Sandhurst, he entered
the army in 1829, but retired from his profession.
From 1837 to 1840, he was employed in exploring the
coast of Western Australia and tracing the sources of
the Glenelg Eiver. During his travels he received a
severe spear- wound, which for many years was a cause
of suffering to him. His " Journals of Discovery "
give the romance of Australian exploration, and in an
unobtrusive way reveal his character for courage, perse-
verance, and endurance under privation.*

Before assuming the reins of office, under " the most
difficult and unpopular of all conditions, namely, the
necessity of rigid retrenchment and the task of creating
a revenue by the imposition of increased duties of
customs," he determined to have a clear understanding
as to the course he was to pursue generally, and the
support he would receive from the Imperial Government,
and he at once addressed a lengthy minute to the
Secretary of State for the Colonies, his inquiries plainly
showing that he was opposed to the policy of his pre-
decessor, and was resolved to grapple with the financial
difficulties sternly and resolutely. He wished to be
informed whether official correspondence was to be
addressed to the Commissioners, or to the Colonial
Secretary ; what was to be the mode of dealing with
the different departments engaged in the receipt and
issue of public moneys ; what provision was to be
made for paying the interest of the public debt ; whether
the system of special surveys was to be continued, and,
if so, upon what principle ; whether the public buildings
in course of erection should be completed or not;
whether, as the Government House was far too vast
for his residence " without extreme imprudence," he

* " Explorations in Western and North- Western Australia,"
published 1841.


would be at liberty to appropriate it to some public
object, and hire a smaller house as a residence; and
then followed a string of queries as to salaries of
Government officers (his own included), the creation of
corporate bodies, and the employment of troops to do
public duty, and to relieve the colony of this heavy
item of expenditure.

To many of the inquiries Lord John Russell was
unable to give direct replies; on others, however, he
was definite and explicit. Thus : " It will be proper that
you should address yourself to the Secretary of State on
all questions relating to the legislative and executive
duties of your Government ; and, further, that under
the existing circumstances of the colony, and until you
receive further instructions, you shall communicate
directly with me generally on all questions of finance.
I will then make such communications as may be
necessary on the subject of your despatches to the
Colonization Commissioners." No objection was raised
to the sale or letting of public buildings not actually
required for the real exigencies of the public service,
due care being taken not to alienate any buildings
which might in the near future be required for such
service, but all public outlay on buildings in course of
erection was to be suspended, except in so far as might
be necessary to prevent dilapidations. The hire of a
smaller house for the Governor could only be allowed if
accommodation could not be obtained in such of the
public buildings as were to be retained and could not
be disposed of. In reply to another query, Lord John
said, " I entirely approve of the measure which you
propose of creating corporate bodies, whether municipal
or otherwise, and of investing them with the power of
imposing rates and assessments, of levying wharfage
and other duties with the view of relieving the public
revenues, and of devolving, as far as possible, on the
inhabitants of the towns and of the rural districts, the
management and the charge of their concerns ; " and,
finally, the Lords of the Treasury concurred with Lord
John Russell, that " no prospect of increase to the rate


of salary at present assigned for the government of
South Australia could be held out to Captain Grey."

The Commissioners being still a constituted body,
possessing certain powers conferred by Act of Parlia-
ment, were allowed to have their say in reply to these
inquiries, but foreseeing that their days were numbered,
and that the colony would soon be placed under the
entire care and control of the Crown, they did not press
for their rights and privileges in the matter of official
correspondence, while all questions relating to finance
they were only too glad to leave to " my lords." With
regard to Government House, if Lord John thought the
Governor should not retain it for his residence, they
suggested " that it might perhaps be expedient to dis-
pose of the house to the Corporation of Adelaide for a
Court House or Town Hall, should it be suitable for
that purpose," adding, " it is not impossible that the
Corporation might offer such a price as would cover the
expense of the erection of the house."

This was only one of innumerable instances in which
the utter incompetency of Commissioners in England to
arrange and settle affairs in the distant colonies was
shown. Little did those good gentlemen, seated in
their armchairs in a snug board-room, imagine when
they made their suggestion that the Corporation of
Adelaide would soon be found in a state of insolvency,
and that the messenger would seize the few chairs and
tables belonging to that august body in part payment
of his salary !

On the 10th of May, 1841, when as yet Colonel
Gawler had received no official intimation of his recall,
Captain Grey arrived in the Lord Glenelg, having been
gazetted as Governor and Eesident Commissioner on the
previous 18th of December.*

Captain Grey, on his arrival in the colony, was kindly
entertained by Colonel Gawler, and on the 15th of May
took the oaths of office in front of Government House.

* " Thus at the early age of twenty-eight," says his biographer,
"George Grey left England as the ruler of her youngest colony,
himself the youngest Governor ever appointed to a similar position."


He began his career in the colony without any osten-
tation, as one who knew well that he had difficulties
and annoyances of no ordinary kind to grapple with,
and who had determined to exercise the strictest pos-
sible economy compatible with the efficiency of the
public service and the state of the colony. From the
first his trumpet gave no uncertain sound. He was
opposed to any kind of extravagance in an infant
settlement, and of course, therefore, he deprecated the
policy of his predecessor. He maintained that in the
early stage of a colony, as there were no producers
either of the necessaries of life or of articles of export,
a large outlay upon extensive public buildings and
town improvements was of no further benefit to the
colony than that those buildings and improvements
were obtained, and that the whole of the money
expended in labour was carried out of the colony to
purchase food and clothing.

Moreover, as the colony was thus altogether de-
pendent upon imports, and as the Government was
monopolizing the labour market, the country settlers
stood no chance of carrying on agricultural operations,
their capital being eaten up by the high price of wages
and of the necessaries of life. Disappointed agri-
culturists were, therefore, compelled to abandon their
legitimate occupations and betake themselves to specu-
lation in land and buildings, and instead of assisting
the general prosperity, only hastened the inevitable ruin.

These facts had been fully and lamentably illustrated
in the experience of South Australia, and the task of
evolving order out of the universal chaos was the
herculean task of Captain Grey. His first step was
directed to obtaining exact information as to all claims
upon the colonial Government and the Colonization
Commissioners, in the hope that "he would shortly
receive instructions from the Secretary of State, which
would enable him to make the necessary arrangements
for their liquidation." Meanwhile, the question how
to procure funds for carrying on the Government was a
burning one.


The estimated expenditure for the first quarter of his
administration was 32,000, to which had to be added
nearly 3000 due for Colonel Gawler's last quarter in
office. Towards meeting this sum there was only 700
in the hands of the treasurer, and with the revenue
decreasing and the land sales falling off considerably,
there seemed little prospect of raising anything like a
revenue to meet even the ordinary expenditure, to say
nothing of a further sum of about 35,000, the amount
of the outstanding claims. Nor, owing to the state of
the times, was there, as Captain Grey had hoped, any
chance of selling the elaborate new premises built for
the Government by Colonel Gawler. t

In his extremity Captain Grey applied to the bank
for a loan, but as he was only offered 10,000, and that
at twelve per cent, interest on his personal security, he
resolved not to attempt the liquidation of any debts
contracted by his predecessor until the result of the
parliamentary inquiry into the affairs of the colony
should be announced.

Meanwhile retrenchment must be made at once, but
it was difficult to know where to begin, and the task
was in any case an unpleasant one. The Great Eastern
Eoad through Glen Osmond * was then in course of
formation, and he proposed to stop the works; but
against this step there was an instant remonstrance in
the form of a memorial and the inevitable public

The discontinuance of the signals on West Terrace
was another grievance; so was the increased rate on
postage, and a tax of a penny on newspapers ; but the
most formidable discontent was on the part of the
labouring classes. The Governor had addressed a letter
to the bench of magistrates, asking them to take into
consideration the position of such immigrants as were
unable to obtain work other than that which the
Government was obliged to provide for them, and to
give their opinion as to the remuneration to be given to
those immigrants with whom a stipulation had been
* Named after Mr. Osmond Gilles.


made, that in the event of their being unable to obtain
work elsewhere, the Government would employ them
at reduced wages.

The magistrates met and passed a series of resolutions
in which the practice of inducing the labouring popula-
tion to hover in and about the town was deprecated
on the one hand, while on the other the magistrates
considered that the Government was bound to afford
them such means of subsistence as would put them
above want. They recommended, as an adequate
Government allowance, seven shillings a week for a
single man, ten and sixpence for a man and his wife,
and for % every unemployed child in the family, up to
three inclusive, two and sixpence each per week ; that
all immigrants employed by the Government should be
obliged to work daily, including Saturday, from 6 a.m.
to 6 p.m., deducting one hour for breakfast and another
for dinner. During the winter months May, June,
July, and August the hours to be from seven to five
o'clock. It was further recommended that, in the event
of any immigrant refusing from a settler employment
at the rate of 20 per annum and rations, or any man
and his wife refusing 30 and rations, they should be
struck off from Government employment and not be
taken on again.

These recommendations the Governor adopted, and
the usual outcry arose, followed by public meetings,
memorials, and deputations. To these succeeded the
formation of organizations for self-protection, and a
resolute determination not to accept the terms of the
Government. But while the agitation was being kept
up, the resources of the people were steadily going
down, and distress, at the worst season of the year,
became very general. In proportion as the Governor
remained firm the dissatisfaction of the people increased,
until on more than one occasion an outbreak was
anticipated, which, in the absence of any military force,
might have been serious. At one time several
hundred men, in an organized body, marched to
Government House and threatened the Governor with


personal violence, but his firmness and coolness had
the effect of quelling the disturbance.

Captain Grey had an advantage over his predecessor
in this respect, that he was instructed to act, in all
matters connected with the revenue and expenditure
of the colony, in concert with the members of the
Legislative Council, who were to share with him the
responsibility of their action.

About the middle of July intelligence was received
in the colony that a Select Committee of the House of
Commons had been appointed, upon the motion of Lord
John Eussell, to consider the Acts relating to South
Australia and the actual state of the colony. The
committee was composed as follows : Lord Howick,
Lord Stanley, Sir George Grey, Mr. W. E. Gladstone,
Mr. G. W. Wood, Lord Mahon, Mr. J. Parker, Lord
Eliot, Mr. Ward, Captain A'Court, Mr. Vernon Smith,
Mr. Eaikes Currie, Mr. Sotheron, Lord Fitzalan, Mr.
George Hope, and Sir William Molesworth.

The first report of the committee was brought up in
March, and it was recommended that " provision ought
to be made to meet the actual engagements incurred
under the authority of the Eesident Commissioner and
the Commissioners appointed under the Act 4 Will. IV.
c. 95, and to repay the sums due to the Emigration
Fund ; and that such provision should not be delayed
until after this committee shall have completed the
inquiry in which it is engaged into the South Australian
Acts and the general state and prospects of the colony."

A few days later the further news reached the colony
that the British Parliament had, upon the motion of
Lord John Eussell, voted the sum of 155,000 for
South Australia, and that it was henceforth to be
considered and treated as a Crown colony.

In moving this vote Lord John said

" In proposing that Parliament should relieve the
colony from its present financial embarrassments it was
not perhaps necessary that he should state his opinions
as to the manner in which the colony should be in
future governed, but he had no hesitation in stating


that he thought the principles of government which
were applied to the other colonies should be applied to
the colony of South Australia. That, making what pro-
visions they thought proper with respect to the sale of
land and the application of money derived therefrom,
the provisions which placed the government of the
colony in the hands of Commissioners, and directed that
the whole of the expenses of the colony should be
defrayed by their orders, and not by the Treasury,
should be repealed so as to bring the colony into the
same state as other colonies with regard to its govern-
ment; that if the Crown was to do anything for the
colony, the responsible ministers of the Crown should
have a more direct control ; that the Governor appointed
by the Crown should correspond, not with the Com-
missioners, but with the Secretary of State and the
Government ; and with respect to the financial question,
that when the Governor should write home, his applica-
tion should be referred to the Treasury, and that their
opinion, as well as that of the Secretary of State, should
be taken before the directions of the Government were
sent out. For himself he could see no good indeed,
he could see nothing but mischief in that anomalous
kind of government in which the Crown had a nominal
direction, yet, in fact, left everything to the Com-
missioners, whilst the Commissioners felt bound by the
Act of Parliament, so that neither could be considered
as responsible. If the committee thought it proper
that the colony of South Australia should govern itself,
and that the persons there should have a representative
constitution, although he confessed that that was not
his opinion, he should feel no insuperable objection to
it. He should feel that it would in time, though per-
haps not until after a considerable time had elapsed,
struggle through its difficulties and obtain considerable

The second report of the Select Committee of the
House of Commons reached South Australia inNovember.
In it the committee called attention to certain funda-
mental defects in the South Australian Act, namely


1. That the provisions of the Act were to be carried
into effect by a Board of Commissioners, the members of
which were to be appointed and removed by the Crown,
but over whose movements the responsible members of
the Crown could exercise no adequate control. 2. The
inconvenient division of authority. " While one depart-
ment," it was said, "was made responsible for the
payment of the colonial debt, another had the manage-
ment of the fund out of which it was to be paid, and
whilst one was responsible for conducting the public
service the money by means of which it was to be con-
ducted was placed under the control of another. If
the revenues of the colony were mismanaged by the
local Government the Commissioners could not satisfy
the public creditor ; if the funds raised on the security
of those revenues were mismanaged by the Com-
missioners the Government could not conduct the
public service," and so on. 3. The uncertainty of the
mode prescribed by the Act for obtaining the supplies

Online LibraryEdwin HodderThe history of South Australia from its foundation to the year of its jubilee (Volume 1) → online text (page 14 of 34)