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great that, in the absence of business and more profit-
able employment, public meetings and other demonstra-
tions for the ventilation of grievances became the order
of the day, the Chamber of Commerce taking the lead
in these gatherings and inviting the colonists to meet
and deliberate upon the financial position of the colony.

There was a curious misapprehension in some
quarters as to the real cause of the embarrassment.
The case was simply this: the rapid expenditure in
the early days suddenly ceased at the very moment
when the colony was most in need of such support.
Since its foundation, five years previously, the local
Government had expended between 400,000 and
500,000 ; the South Australian Company had in-
vested an equal amount ; the colonists had imported
and expended upwards of a million; and the whole
of this rapid and enormous expenditure stopped at the
end of 1840. Capitalists ceased to come to the colony,
and, worst of all, the colony lost its credit with the
mother country. Hence the disastrous position. De-
pression in every article of merchandise and every
kind of colonial property followed, and sixteen thousand
persons were plunged in more or less of distress, which
could be alleviated only by assistance from without,
that is to say, the importation of capital into the
colony.

In the press, and at public meetings, it was stated
that the operations of agriculture were clogged almost
to cessation; that the merchants only existed by
sufferance of the banks and large companies ; that the
profitless pursuits of tradesmen were daily terminating
. in insolvency ; that labourers were seeking other



174 THE HISTORY OF SOUTH AUSTRALIA. [CHAP. VII.

shores, or were sunk into the condition of pauperism ;
and that hundreds of families, not belonging to either
of the before-mentioned classes, found that they had
exchanged wholesome abundance in England for a bare
and precarious subsistence in the colony.

And yet there was scarcely any step taken by the
Governor and his Council for the improvement of affairs
that did not meet with the opposition of the colonists !
To increase the revenue, bills were passed imposing
additional dues on the shipping visiting the port, and
to protect the customs duties by preventing private
distillation. There could be no doubt that it was
desirable to discountenance as far as possible the
import of those things which the colony could itself
produce, but it was questionable whether it was wise
to levy such high charges as would practically prohibit
the importation of merchandise.* A meeting to protest
was held in the Queen's Theatre, when it was stated
that whereas formerly the charges on a vessel of five
hundred tons were 10, under the new dues they were
raised to 50. The imposition of high duties on spirits
was also considered "to be opposed to the public
interests."

Soon after this a reduction was made in the port
charges, but not enough to satisfy those connected with
the shipping interest ; and later in the year the City
Council took the unconstitutional course of drawing up
a petition to her Majesty, for presentation through the
Governor, praying for a disallowance of the Acts im-
posing the obnoxious rates and taxes. At the same
time, a memorial was presented to the Governor, praying
him to suspend the operation of those Acts until her
Majesty's pleasure became known.

To the latter request Captain Grey replied

" I have been in no slight degree surprised to find
that the Corporation, who have shown themselves so
jealous for the preservation of the British constitution,

* It was, however, very much a matter of " Hobson's choice,"
and the duties were temporarily imposed as the only available
means of obtaining ready money.



1842.] CAPTAIN GREY UNPOPULAR. 175

should have solicited me to suspend certain laws, and
thereby set all the principles of that constitution at
defiance. A moment's consideration should have
sufficed to show the Corporation that a Governor has
no power to suspend the operation of the laws. . . ."

Throughout the year the Governor had been incurring
great responsibilities by drawing on the Treasury for
such sums as he considered necessary, without knowing
what the consequences might be. These responsibilities
were largely increased in August. He received in-
structions from the Colonial Office that, in the present
critical state of affairs, all the unemployed labourers in
the colony were to be sent forthwith to Sydney. This
was regarded, not only by the Governor, but by nine-
tenths of the people, as impolitic to the last degree;
and, on the receipt of a numerously signed memorial
praying him to prevent this great loss to the colony,
he at once took upon himself the responsibility of
disregarding the instruction, and also of continuing to
draw on the British Treasury. With the example and
fate of his predecessor before his eyes, this was even a
bolder stroke than his unauthorized payment of the
claims upon the local Government, and a general
feeling of uneasiness took possession of men's minds.
Colonel Gawler throughout all his dashing career
carried the people with him and enjoyed their con-
fidence and sympathy, but Captain Grey had not
this advantage ; his policy was unpopular in all
quarters. Every step he took, therefore, was watched
with suspicion ; and even those who urged him on in
the most perilous course of all that he had taken were
foremost among those who, when the bolt fell, attacked
him for the consequences of his action.

The storm that had been gathering through all the
earlier months of the year broke in October, when
tidings reached the colony that drafts drawn by Captain
Grey on the British Treasury had been dishonoured.
Unfortunately, no official despatches reached the
Governor at the same time, and he was left in a most
difficult and unenviable position "naked to his



176 THE HISTORY OF SOUTH AUSTRALIA. [CHAP. VIL

enemies," as it were, every claimant holding him per-
sonally responsible. For the time his credit was
totally destroyed ; the banks refused to negotiate any
more of his drafts, and he had to fall back upon the
commissariat chest for 1800 to meet urgent current
expenses of government.

It was not until Christmas Eve that the long-looked-
for despatches arrived, and then there was a plentiful
and important supply. They announced the passing of
" An Act for the Better Government of South Australia,"
and " An Act for regulating the Sale of Waste Lands in
the Australian Colonies and in New Zealand," and they
also explained the reason why Captain Grey's bills,
amounting to about 14,000, had been dishonoured.

The whole of the bills drawn for the current service
of the colony would, it was intimated, be accepted, but
those drawn in part payment of outstanding claims the
Lords of the Treasury declined to accept, and directed the
Governor to issue debentures to the holders in exchange
for their bills, such debentures to bear interest at five
per cent, from the date at which the bills became due.

In the despatch to Captain Grey making these
intimations, Lord Stanley said

"The justification which you have urged for the
course taken by you is in substance this that you
understand that all the bills drawn by your predecessor
were to be accepted and paid, and that the claims, in
satisfaction of which you were about to draw those
bills, were similar to those on account of which Governor
Gawler drew his bills. It is true that, in order to
sustain the credit of the colonial Government, the
home Government ultimately consented to provide for
the payment of Governor Gawler's bills, but you appear
to have overlooked the fact that Governor Gawler's
conduct in drawing those bills was strongly disapproved
of, and that it formed one of the principal grounds of
his recall. You were warned not to draw any bills
without having previously received authority to do so,
and not to take any measures on your own authority
for the settlement of the debt."



1842.] CAPTAIN GREY'S BILLS DISHONOURED. 177

This was strong and somewhat unjust, as Lord
Stanley failed to take into consideration the fact
that the bills drawn by Captain Grey were not for
debts contracted by him but by his predecessor, and
were, in fact, mainly for the fulfilment of contracts
entered into before Colonel Gawler received positive
instructions not to incur further liabilities or draw
any more bills. There was, therefore, as Lord Stanley
very well knew, no more reason for the rejection
of these claims than those recognized and provided
for, and in a private despatch, dated June 21, 1843,
Captain Grey had the satisfaction, such as it was, of
receiving from Lord Stanley an acknowledgment of
this. "It would, indeed, be an ill return," he wrote,
" for the essential and most effective services which
you have rendered in reducing the expenditure and
re-establishing the finances of South Australia if you
should be left to discharge from your own private
fortune a debt originally contracted, not by yourself,
but by your predecessor, for the public service of that
colony."

The consequences of the rejection of the bills were
very serious. In the first place, the colonists concerned
had been kept waiting for eighteen months before they
had any settlement at all ; their claims were then
arranged^ by the Governor's bills on the Lords of the
Treasury, to get which cashed they were obliged to pay
the bank five per cent, discount. The bills were sent to
England and refused acceptance ; then the lawyers got
hold of them and, in addition to the expense of noting
protest, there was the charge of twenty per cent, for re-
exchange, which, according to the commercial laws of
the colony, every endorser of a bill on England was
liable for if that bill was not paid. The lawyers in the
colony were then instructed by the banks to request an
early reimbursement from the unfortunate endorsers,
who were powerless to do more than to hand over the
debentures bearing five per cent, interest, whilst the
current rate of bank interest in the colony was at that
time from ten to twelve per cent. " A child," says Mr.

VOL. I. N



178 THE HISTORY OF SOUTH AUSTRALIA. [CHAP. VII.

Button in his work on South Australia,* " might guess
the consequences to nine out of ten of the holders of
these bills the expenses on the returned bills, being
nearly half the amount of the bills themselves, are
finally settled by an advertisement of the sheriff in the
public papers announcing the property of A., B., or C.
for peremptory sale ! "

Of course there was a great outcry against Captain
Grey, and he was made the scapegoat to bear all the
responsibility and all the difficulty of the position.
How he came through the embarrassment we shall
see later on. Meanwhile attention was diverted by
the publication of the two important Acts passed by
the Imperial Legislature and the despatches accom-
panying them.

The " Act for regulating the Sale of Waste Lands in
the Australian Colonies and New Zealand " was passed
on the 22nd of June, and made, as suggested by the
Select Committee of the House of Commons, an im-
portant alteration in the mode of applying the proceeds
arising from the sale of lands. By the original Act it
was provided that all lands should be disposed of at
the uniform price of 1 per acre, and the entire
proceeds be applied to emigration. The new Act
provided that all waste lands, except blocks of 20,000
acres, should be put up to public auction at the
minimum price of 1 per acre, and that only one-
half of the proceeds should be applied to the purposes
of emigration, the other half being applicable to local
improvements, the aborigines, and so forth.

Under the new Act the power of sale and conveyance
was vested in the Governor, who was authorized to
divide the colony into any number of territorial
districts not exceeding four, in the event of its being
deemed expedient to adopt different sums respectively
as the minimum for the upset price of land in different
parts.

The most important despatch was that conveying a
copy of the Act passed on the 15th of July, entitled " An

* " South Australia and its Mines," by Francis Dutton. 184C.



1842.] SOUTH AUSTRALIA A CROWN COLONY. 179

Act for the Better Government of South Australia." Its
first section repealed altogether the two former Acts,
and with them the authority under which the Board
of South Australian Commissioners and the Eesident
Commissioner exercised their functions ; the fifth
section empowered her Majesty to establish a form
of legislature similar to that previously in force in
all the other Australian colonies, and instructions were
sent to the Governor, under the royal sign manual,
constituting such a Council as being, at least for the
present, best suited to the wants and conditions of the
colony, the hope being held out that at an early period
it might be expedient to grant to the inhabitants of the
colony a certain degree of control over its resources and
expenditure by means of popular representation in the
local Legislature.

A few days previous to the passing of this Act
which transferred the colony from the Commissioners
into the hands of the Crown Lord Stanley laid a
statement of the financial affairs of the colony before
the House of Commons, embracing not only the main
items of the debt, in a classified form, but the manner
in which he intended to dispose of the several sums.
The total amount of liabilities was stated to be
405,433. Of the first item, namely, the Parlia-
mentary grant of 155,000 advanced the previous
year, he asked the House to forego the payment.
Colonel Gawler's remaining unpaid bills, amounting
to 27,290, and Captain Grey's bills on account of
emigrants' maintenance, amounting to 17,646, he
recommended should be paid. The 85,000 borrowed
by the Commissioners, bearing interest at from six to
ten per cent., to remain outstanding at three and a half
per cent, interest, the bondholders being guaranteed
payment by the British Treasury out of the Con-
solidated Fund. The 35,000 outstanding debts of
Colonel Gawler, and the 84,697 borrowed from the
Land and Emigration Fund, were not at present to
be made good, but, as we have seen, Captain Grey was
instructed to issue debentures in the colony at interest



180 THE HISTORY OF SOUTH AUSTRALIA. [CHAP. VIL

not exceeding five per cent. Lord Stanley further
signified his intention of moving for the sum of
15,000 to be placed upon the estimates for carrying
on the government, and with that amount he thought
the colony would be in a healthy and prosperous condi-
tion.

Despite all drawbacks, by the end of the year (1842)
Captain Grey had succeeded in getting the machinery
of his Government in good working order, and many
important measures had been taken in the interest of
the colony. A Board of Audit was appointed, and all
public accounts were submitted to their careful scrutiny ;
an Emigration Board had been established for hearing
and judging cases requiring relief; the road across the
swamp to the port was purchased from the South
Australian Company for 12,000 acres of land, in lieu
of the 13,000 paid by the Company for its construc-
tion; new roads had been made and streets repaired,
37,814 acres of land had been surveyed for selection,
and large tracts of fresh land had been discovered in
the north; the raids of the natives upon overland
traders had been checked by the appointment of Mr.
Eyre as resident magistrate at Morrundee, and friendly
intercourse to some extent established ; a system of
tender had been adopted for the supply of everything
required for the public service ; provision had been made
for the regular fortnightly transmission of an overland
mail between Sydney, Melbourne and Adelaide, the
service to be performed by mounted police, who would
gather up intermediate intelligence along the line of
route, and extend some protection to settlers on the
overland track ; and other arrangements and improve-
ments had been effected. As a set off, there were the
dishonoured bills drawn by Captain Grey ; but had he
not drawn those bills, the numerous Government
creditors who hung about Adelaide would never have
dispersed into the country. As it was, the country
districts became the chief scenes of activity and
progress ; 19,641 acres of land were brought under
cultivation during the year, owned by 873 proprietors.



1842.] CLOSE OF FINANCIAL CRISIS. 181

When harvest came, rich and bountiful, there was
some difficulty in gathering it in, so large a number
of the male population having left the colony ; but the
military were permitted to give their assistance, and
the tradesmen of Adelaide and many gentlemen not
otherwise occupied lent a helping hand, and so it was
garnered.

While, however, the country districts were enjoying
a small degree of prosperity, the city was suffering
most severely, not only from the withdrawal of its
population, but also from want of capital. At the end
of the year, 642 out of 1915 houses were vacant, and
216 more were neglected, or had fallen into decay.
During the year no less than 136 writs for the
recovery of debts had passed through the hands of
the sheriff, and 37 fiats of insolvency had been issued.
Money in most cases had ceased to pass as a circulating
medium for the purchase of the necessaries of life, and
a system of barter and " truck " was almost universal.
The various trading and commercial interests had
become curiously interwoven with one another to
enable the " order " system to be carried out exten-
sively and with facility. Tradesmen had " orders "
upon merchants, and servants upon tradesmen, and as
the holders had to take the article supplied, however
inferior, there was a perpetual murmuring and
dissatisfaction.

Depressing as these things were, there could be little
doubt that at the close of 1842 the financial crisis was
practically over, and that the colony had passed through
its greatest trial. But there was no room for boasting ;
the clouds still hung heavy in the horizon, and it was
evident that neither the troubles of the Governor nor
those of the people were at an end.

It was discouraging to read in the newspapers state-
ments like the following : " Property is now selling by
auction in Adelaide and the neighbourhood, in many cases
for less than the title-deeds cost two years ago. Houses
are gladly let to respectable persons rent free, and not-
withstanding this, nearly half the tenements are empty



182 THE HISTORY OF SOUTH AUSTRALIA. [CHAP. VII.

and falling to pieces. . . ." And again : " The Countess
of Durham will take back a large number of persons to
England, and as many as twenty passages have been
paid for in that vessel. Every ship that leaves for the
other colonies takes from fifteen to twenty passengers,
whilst the arrivals are nil" There were glints of sun-
shine through the gloom, and the same newspapers were
able to report at the same time : " The rural districts of
the province present a pleasing contrast to the town.
There everything is activity, and farms are spreading
almost like the work of enchantment over the land,
raised up by the industry of our settlers."

On the 4th of January the Governor called his Council
together, and submitted to them the accounts of the
last year : receipts from all sources, 81,813 19s. 5d. ;
expenditure, 84,531 16s. 1(M., of which 18,069 10s. 5d.
had been spent in the immigration department, the
greater part for the maintenance of destitute persons,
and 26,013 had been paid in liquidation of outstanding
claims; these two items making more than half the
total expenditure, while the entire proceeds of the land
had been included in the total revenue.

Expenditure being still in excess of receipts, the
Governor determined to still further cut down expenses
in every practicable quarter. It is a curious illustration
of the state of the times to find reductions in the salaries
of public servants to the amount of 4000, and that
even the master of the signal station at West Terrace
was to be dismissed unless the public provided the
necessary funds by subscription, in which case " the
Government would allow the use of house, staff, and
signals." During the time of the suspension of the
signal master, Messrs. Thomas and Co., the proprietors
of the Register, signalled the arrival of vessels from
the flag-staff erected on their premises in Hindley
Street.

Even more significant were the notices that tenders
would be received for leasing to the public the Govern-
ment wharf at the port, and that the leases of premises
held by the Government for bonded stores, for the



1843.J RETRENCHMENT AND DISCONTENT. 183

building used by the Supreme Court in Whitmore Street,
and for the house used for the resident magistrates'
court in Currie Street, would each be abandoned ! But
the crowning humiliation was perhaps the announcement
that, " in consequence of the reduction in the post-office
department, the services of the letter-carrier to North
Adelaide would be dispensed with ! " A " cheese-
paring " policy is always hateful to the majority, and it
was so in South Australia.

On the 20th of February, 1843, the "Act for the
Better Government of the Australian Colonies " came
into force, but in the midst of somewhat troublous
times. The Examiner opened a heavy fire upon the
Governor, alleging in strong language that all the
disasters of the colony were attributable to him and
his policy. The inflammatory articles worked upon
those who had suffered in the crisis and others, and
as one result a "monster indignation meeting" was
called, and, on the 16th of March, in the Queen's
Theatre, a crowded assembly of malcontents moved
" total want of confidence in the administration of his
Excellency Captain Grey," and a petition to her
Majesty was drawn up, humbly praying "that your
Majesty will be graciously pleased to take the case into
your most gracious consideration, and either recall his
Excellency the Governor, or issue directions for such
an amended mode of administering the Government of
the province as shall to your Majesty seem meet."

Captain Grey was well aware of the odium that was
being cast upon him in so many quarters, and he had
the good sense to take it calmly. He knew that the
majority of the colonists were interested in the main-
tenance of a lavish Government expenditure. During
the twelve months preceding his arrival, about 150,000
had been distributed, in the form of salaries, allowances,
and lucrative contracts, amongst a population of 14,061
people, who only contributed 30,000 towards their
own support ; in other words, the British Treasury
had paid to every man, woman, and child in the pro-
vince upwards of W per head per annum, or, if only



184 THE HISTORY OP SOUTH AUSTRALIA. [CHAP. VH.

the males of twenty-one years and upwards were con-
sidered, more than 12 each per annum was .paid
by Great Britain for the support of themselves and their
families.

No wonder that, when this liberal annual contribution
was withdrawn, the people should break forth into
lamentation at their indignation meeting !

Even the natives took the cue and were wont to say,
" No good, Gubner Grey, berry good Gubner Gawler
plenty tuck out."

It was not until the 20th of June that the new Council
was called together. It consisted of eight members,
four official (including the Governor) and four non-
official.* In his inaugural address the Governor an-
nounced that, in order to give the public the greatest
facility for becoming acquainted with the minutest details
of the financial arrangements of the Government, and
of increasing their knowledge of its legislative measures,
he sanctioned the admission of strangers to the Council
chamber to hear the debates.

This formal meeting was mainly for the purpose of
administering the oaths to the members who had been
gazetted, and of hearing a lengthy address from the
Governor. But on the 10th of October the Legislative
Council met for the transaction of business in the new
building in North Terrace erected for their use, the
gallery and also the body of the house being crowded
by strangers, it being the first time that the public had
ever been admitted to the privilege of hearing the
deliberations of the Council, and the first time that
non-official members had taken part in its proceedings.

During the session which came to a close on the 14th
of November, sixteen Bills embracing some important
and useful measures were passed, including "An
Ordinance for avoiding Unnecessary ^Repetitions in the



Online LibraryEdwin HodderThe history of South Australia from its foundation to the year of its jubilee (Volume 1) → online text (page 16 of 34)