AACo and Warrah. 1820's.

All this information compiled by Professor John Atchison of Armidale.

CHAPTER 1

 

THE FORMATION OF THE COMPANY

 

 

      The Australian Agricultural Company arose to meet different, but complementary, needs in Australia and Britain. The colony of New South Wales lacked the risk capital, management skills and breeding stock needed to form, develop and expand a fine wool industry. In the United Kingdom, economic and social conditions after the Napoleonic Wars inclined British woollen manufacturers, to view their traditional suppliers in Spain, Saxony and Austria with unease. A few of these manufacturers, with their bankers and shipping agents, were susceptible to a novel suggestion that a remote, convict colony enjoyed conditions of soil and climate favourable to producing a soft wool suitable for blending with home-grown coarse wools. An awareness of mutual advantage and need fostered the emergence in 1824 of Australia's first pastoral corporation. It continues to the present day as one of Australia's largest cattle producers. 

 

      A. A. Company, as it became known, enjoyed favourable antecedents in its founding years and early operations. It was disliked by many colonists. Some merchants and farmers, and especially the spokesmen for the emancipists, feared its scale of operation and saw it as an extension of privilege and detested established authority. Their feelings more matched in a parallel, but more guarded, way, by their opponents, the exclusives, the emerging elite. These socially, eligible men, former military and naval officers and imperial service bureaucrats who had stayed on in the colony at the end of their tour of duty or migrated as free settlers, desired to see established around Parramatta, Bathurst, Goulburn and Maitland a plantation type society of large estates studded with manorial homesteads and surrounded by thick, rich pastures cropped by large flocks and herds tended by convict servants and emancipist employees. A society not unlike the cotton states of the United States south, rather than a Macquarie type colony of emancipists restored to full civic rights and aspiring to landed pretension, was favoured by the group emerging as a ruling class dominating the executive, judiciary and advisory legislative council being established in the colony at the time the Australian Agricultural Company was being formed in London. A corporation on the scale envisaged by its founders, while it offered advantages to the exclusives, also threatened their hopes to monopolise wealth and power as the colonies moved from being strict gaols to eventual free societies with representative and responsible governments. 

 

      The Company would face perilous beginnings as its officers and servants learned to deal with colonial society. After a troubled foundation period a streamlined management structure, established by determined officers, would enable the A. A. Company to make its mark on Australia's economic story in a series of significant, and often understated, achievements. In the pre-gold-rush period the quality of its stock established it as the leading wool producer and guaranteed, also, that its cattle and horses were eagerly sought. In the second quarter of the nineteenth century its monopoly rights to coal facilitated the emergence of a strong, extractive industry in which, during the second half of the century, it was the leading competitor in domestic coal production against rival collieries. In the late nineteenth and early twentieth centuries its extensive Warrah station on the Liverpool Plains was judged the finest pastoral property in a land bejewelled with many large and highly capitalised runs. In the second half of the twentieth century it was for some years Australia's largest beef cattle producer and, even after losing that niche, remains third on the list. Concentration on its pastoral achievements, and formerly its coal-mining operations, should not deflect notice away from its present activities in agriculture.

 

      This listing of achievements indicates the eventual successes which made the Australian Agricultural Company a strong factor in pastoralism, agriculture and mining. Most of these accomplishments are little known. A long tradition of interest in the firm's early years is partly responsible for neglect of its major performances. By returning to a review of the early decades of the A. A. Company - its formative and developmental phase - it will be possible not only to understand the major constraints and difficulties associated with colonial growth but to provide historical perspective to an enduring Australian dilemma, the role of overseas capital and decision-making in the exploitation of local resources. Today, Australian Agricultural Company Limited is Australian owned and controlled. This is a recent occurrence, an upshot of the last decades. The story of A. A. Company's foundation, and later growth, suggests strongly that it could not have been otherwise. Our story lies with the struggles and frustrations of these early years. It shows how the fine wool and coal-mining industries could not have been established without the capital, skills and stock supplied by British entrepreneurship. 

 

      Given the nature of New South Wales and Van Diemens Land as penal colonies, it was inevitable that decision-making in London shaped the structure and scope of the corporation. Government officials in Downing Street and Westminister with City of London businessmen combined to midwife the company once plans were made for its formation. 

 

      Substantial doubt prevails on the intermediate origins of the A. A. Company. Australian tradition views the Company as a Macarthur foundation, a claim strongly rebutted by its early London office. This belief was founded on earlier lobbying by Captain Macarthur, and then Gregory Blaxland, to form corporations similar to that which eventually emerged. The belief is also grounded in a confusion of the role of John Macarthur junior, the most intelligent son of John and Elizabeth Macarthur of Elizabeth Farm, Parramatta. John, who was reading law at Lincolns Inn Court was instrumental in arousing enthusiasm for the firm's formation. He did this, however, only after a suggestiofi had been made to him by a merchant prominent in the British wool trade. This merchant was probably Thomas Ebsworth. 

 

      It is necessary to clarify the roles of the merchant and the budding lawyer to appreciate in context the Australian Agricultural Company. John Ritchie has shown conclusively that between 1819 and 1822 neither the situation in the English woollen industry nor that of wool production in the colony was such as to ensure that fine wool would become the staple export of New South Wales. His definitive study of Commissioner J. T. Bigge is crucial to proper understanding of the emergence of the A. A. Company. Ritchie stresses not only that Bigge, as a result of his enquiries in the colony between 1819 and 1821, saw fine wool as the only product with a possibility of becoming a staple export but, most importantly, that he arrived at his conclusions almost in spite of the situation of British manufacturers and colonial pastoralists. Bigge's recommendations benefited manufacturer and pastoralist as an incidental result of his conclusions which derived logically and inevitably from his ideas on the convict transportation system. 

 

      There is strong doubt as to whether English merchants and manufacturers were concerned with the predominantly coarse wool imported from New South Wales as late as 1828. In 1823 when Bigge's Report of the Commissioner of Inquiry on the State of Agriculture and Trade in the Colony of New South Wales, was tabled in the House of Commons, and then ordered to be published, it required a sense of daring and long-term judgment to envisage New South Wales, let alone Van Diemens Land, as a major producer of fine wool. The entrepreneurial mix was injected by the merchant who read Bigge's third report, Agriculture and Trade, when it was published.  

 

      Thomas Ebsworth was with the London firm of Marsh and Ebsworth and in a position to enjoy confidential contact with young John Macarthur. His firm handled the Macarthur family wool. He was the auctioneer in 1821 when a bale of Macarthur wool brought 124d. a pound. His sons, Frederick, Thomas and James, migrated to Australia with the A. A. Company and enjoyed long and fruitful associations with it. These factors make it highly likely that Thomas Ebsworth would not only have had a strong interest in reading Bigge but that his suggestions would be followed up by the energetic ambitious agent of Macarthur family interests in London. The speed with which the Company was formed and the time needed for mail to reach Australia by sailing ship ensured that news of the A. A. Company's formation came as a surprise to the family in late October, 1824.19 Although Captain Macarthur played no role in the formation of the Australian Agricultural Company, the venture formed in 1824 is in direct, lineal descent from the plans suggested by him and others, two decades previously. 

 

      The young Macarthur, however, played a prominent role. Even while Bigge was preparing his report for the Colonial Office, John fostered his close friendship with Robert Wilmot Horton, the Under-Secretary, and formed a valuable association with Edward Barnard, the New South Wales Agent in London. Macarthur attempted, unsuccessfully, to anticipate Bigge's news. As soon as the Commissioner's report was published and Ebsworth made his pre-empting suggestion, Macarthur began to lobby various bankers and merchants to form a company. 

 

      During 1823 and 1824 seminal discussions took place. By early 1824 plans had matured. On Saturday morning, 10 April, 1824, young Macarthur convened a meeting in his Lincoln Inn Chambers. Laid out on the table were extracts from Bigge's published reports, and heads of proposals for a joint-stock company. The meeting was chaired by John Smith. Smith, of the banking house of Smith, Payne and Smith and M. P. for Midhurst, County Sussex, was a key person because of his extensive banking, business and political interests. 

 

      Seated around the table were Baronet Sir Robert Farquhar, lately returned from Mauritius and James Brogden, M. P. for Launceston, County Cornwall and Chairman of the Ways and Means Committee of the Commons. Also present was Richard Mee Raikes, M. P. and a director of the Bank of England. Stewart Marjoribanks, M. P. for Hythe, County Huntingdonshire and a brother of the deputy chairman of the East India Company, sat with G. G. de Hochepied Larpent of the firm Paxton, Cockerel! and Company, William Ward and J. H. Palmer. Thomas Tooke, George Brown, a director of the West India Docks, Donald Maclean and John Macarthur made up the initial group. They represented a diverse cross-section of City of London finance and influence. The meeting focussed on the soil and climate of New South Wales. The perceived potential of the colony for fine wool, especially Bigge's strong recommendations for promoting its growth, was regarded most favourably. 

 

      These men of capital contemplated many advantages from an incorporated company capitalised nominally to £1,000,000 sterling and granted 1,000,000 acres of land. The prime purpose would be the raising of fine wool similar to that adopted on the estates of the Esterhazy and other great families of Germany and Spain. Subordinate to the growth of wool would be the cultivation of Mediterranean products such as grapes, olives and flax. To facilitate wool production skilled families would be 'encouraged to migrate from Saxony and Southern France. 

 

      Hard headed assessment of long-term commercial prospects rather than popular speculative adventurism marked the discussions. Trading figures which showed a marked increase of exports to the colony from £9,301.14.8 in 1819 to £137,908.6.10 in 1823 encouraged a belief that if colonial exports to Britain increased, colonists would demand considerably more manufactured imports from Britain. Although colonial exports traditionally included seal skin, sperm and black oil, and wool, and more recent products included timber, tanning barks, hemp, flax, tobacco, wine and temperate climate fruits, there were particular advantages to be gained from the growth of fine wool. 

 

      British manufacturers consumed annually between 16 and 18 million pounds weight of foreign wool and 144 million pounds of British wool. The most prominent manufacturers judged New South Wales wool to possess special qualities. As well as fineness of fibre, the wool was, like fur, uncommonly soft to touch. When mixed with Spanish and German wool of equal fineness it could be usefully used to correct a certain harshness in the continental product. Even the highest quality European wool was apt to possess this harshness, a character which compared strikingly with the extreme softness of colonial wool. The proposed company, by promoting the growth of fine and soft wool, would raise a valuable raw material in a British settlement and lessen dependence on supplies from Europe, especially from the German states whence wool imports had arisen mainly within the previous twenty years. With the superior advantages of climate and soil, the protection of British institutions currently being established - and the inflow of London capital, it was reasonable to anticipate British woollen manufacturers deriving their chief supplies from a British colony. New South Wales wool would be produced at a cheaper rate than imports from Spain, Saxony and Austria where severe winters added great expense through the need for artificial treatment. A mutual intercourse beneficial to New South Wales grower and British ship owner and manufacturer would result. 

 

      This clear realisation of mutual advantage set the scene for a deputation meeting four days later with the capable, cautious minister charged with oversight of Britain's colonies, Earl Bathurst. Bathurst, aware of Bigge's recommendations that no joint-stock company be formed unless it undertook the proper superintendence of convicts, was generally favourable to the proposals but shrewdly pared down some of them and guaranteed company shares not be brought forward to increase the prevailing spirit of speculation and gambling. Bathurst was guided by Treasury concern, prevalent since the demobilisation after Waterloo, to ease the crisis in finance, agriculture, industry and social welfare administration. Treasury anxiety to reduce unnecessary expenditure could be facilitated by encouraging Bigge's version of a rural export economy jn New South Wales combining the convict assignment system with the encouragement of free settlers as pastoralists. A company such as that envisaged by Smith and his colleagues would accelerate the process if properly controlled. A week later Smith convened a further meeting at the London Tavern in Bishopsgate. From this meeting of nominated directors came a General Committee of Management to pursue overall aims and a Select Committee of Management to carry on negotiations with Government. 

 

      On Saturday, 22 May, the proposals as amended by Bathurst were considered by a Directors' meeting at the London Tavern. The company was quickly assuming shape around eighteen linked proposals relating to wool growing. 

 

      A bill modelled closely on 5 Geo III cap 163, an act of 1810 incorporating the Gas Light and Coke Company,40 passed through the Parliament on 21 June, 1824, and by 5 Geo IV Cap 86 enacted "The Australian Agricultural Company" for the Cultivation and Improvements of Waste Lands in the Colony of New South Wales, and for other Purposes relating there to. 

 

      On 1st November the Australian Agricultural Company was granted a Royal Charter. This defined the limits and purpose'of its operation. The Charter safeguarded the public interest as well as that of the Company. It reinforced also the mutual advantage to both Britain and Australia of the corporation, and reflected the peculiar nature of the penal colony. The Charter provided for the payment of quit-rents over a period of twenty years, or the redemption of the same by paying the capital sum of twenty times the amount of the rent so to be redeemed. The charter also stipulated that no land should be sold for five years after the formal transfer of the grant, and that the land was absolutely inalienable until the sum of £10,000 had been laid out in the formation of roads, erection of buildings, cultivation, fencing, draining, and other improvements. The land was valued at one shilling and sixpence per acre. The annual quit-rent amounted to 30/- for each parcel of land valued at £100 sterling. 

 

      The Act of Parliament and the Royal Charter specified the founding character of a corporation destined to play a long role in Australian industries. Apart from the stipulation that no rival joint-stock company with similar aims be established in New South Wales for twenty years, no other exclusive privileges and no peculiar jurisdiction In the colony were desired. 

 

      The Australian Agricultural Company was thus founded with the primary object of producing fine wool as an export commodity to Great Britain. To achieve this objective it would purchase in New South Wales such flocks of good quality sheep as were available - mainly crossbreeds from Cape and Bengal sheep - and then increase and improve them by importations of the purest race from Spain and the Electoral Domains of the King of Saxony. To boost the level of skill in the emerging colonial enterprise, the A. A. Company would send out free, experienced agents and overseers to employ and train convicts as labourers and shepherds. Eventually 1400 convicts would be employed, reducing government expenditure by £30,800 annually. To boost management expertise the Company would send out Europeans skilled in merino sheep operations, as well as in the sorting and preparation of fleeces for the London market. It would provide facilities for diffusing this useful knowledge. In short, the Australian Agricultural Company was intended to promote the system of rural industry directed by the Home Government on Commissioner Bigge's recommendations as being best adapted to colonial needs and conditions. The A. A. Company's educational function would diffuse through all classes of colonial society knowledge of wool growing and, then, various agricultural pursuits. 

 

      Rather unexpectedly, coal-mining was added to these pursuits five months after the granting of the Charter. Again, substantial doubt persists on the precise origin of the suggestion for the A. A. Company to take over colonial mines on the Hunter River at Newcastle. It is likely the Colonial Office, rather than the London Directors, took the initiative. There is no doubt, however, that the proposal met an immediate and keen response from directors of the A. A. Company who were either directors of the East India Company or had close connections with it. Expansion of steam ship activity not only in Indian waters but also southwards to Batavia would be facilitated by access to colonial coal. There were no known coal deposits in India and coaling stations around the Indian coastline were being supplied with coal shipped out from Newcastle-upon-Tyne, England. Obviously, convict and trading vessels from England to Sydney could reload a useful cargo to Batavia, Calcutta and other ports on the Sydney - India leg of their return route to England. 

 

      The A. A. Company Court of Directors moved quickly on the suggestion as, by March 1825, their first chartered ships were preparing to weigh anchor. Smith, again drawing on Bigge's Trade and Agriculture, submitted proposals for leasing mines at Newcastle, as well as an ambitious and far-reaching proposition for leasing any districts endowed with minerals. Bathurst and Wilmot Horton shrewdly parried this latter proposal and referred jurisdictional problems on the basic option to the Treasury and the Duchy of Lancaster. After some delay, Wilmot Norton stated to a deputation the principles upon which the mines would be leased. The Special Committee of Management submitted a second list of proposals to facilitate negotiations. Bathurst then gave a definite decision. 

 

      The Company was permitted to lease the Newcastle coal mines for 31 years, under various conditions governing payment of rent and determination of the price of coal.

 

     

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      The Australian Agricultural Company was essentially a British enterprise owing its inspiration and capital to English merchants and bankers. 

 

      The Company was first of all British in its initiative. Without the initial suggestion of Thomas Ebsworth it is doubtful whether the Company would have been formed. The Company was, secondly, an enterprise almost completely British in its capital formation. As Australia lacked persons with sufficient reserves of capital to form such a large venture, the company would be formed predominantly by British investors taking up shares and then paying further instalments as calls were made on them by the Directors. As successive calls were made the Company's base would be increasingly capitalised. Eventually, as the Company's export trade in wool and coal accrued profits, dividends would be issued to the share- holders. A proportion of revenue earned would be reserved for future expansion. 

 

      As G. S. Le Couteur has recognised, such joint-stock financing represented a radical change in traditional capitalism. Previously the sole owner or the parties who managed the venture provided the necessary capital and assumed the full risks without limitations of liability. Joint- stock finance made possible a different form of economic world. It was built to a different scale and organised in a different way. Great concentrations of capital and labour now moved uneasily together to execute tasks .nominated by professional managers. The investors usually had no knowledge of the industry to which their savings were being committed. The investment and management factors became divided. In the establishment stages of any new venture, especially in a new land, error and unprofitable operations were unavoidable. It was important to maintain the confidence of subscribers. The Australian Agricultural Company, a paradigm example of such joint-stock company formation in the second quarter of the nineteenth century, would provide ample evidence of the truism of the latter judgment.

 

      The A. A. Company's nominal capital base of £1,000,000 was established by issuing to investors 10,000 shares of £100 each. Gradually, as the company moved from planning stage to profitable operation, investors would be called upon in instalment. By 31 December 1852, at the end of the formative decades, calls on the shareholders to the sum of £30 per share would be made, making the total paid-up capital £300,000. In addition, £50,000 would have been transferred to the capital account. The, paid-up value of each share would be thus £35. Each investor was still then liable for calls totalling £65 per share. 

 

      All but 580 shares, allotted to colonists, were retained by British investors. Such family groups as Brownrigg, Buckle, Compton, Curtis, Easton, Farquhar, Harrison, Larpent, Marjoribanks, Norman, Raikes, Smith, Thompson, Thornton and Villiers stand out in the published list of proprietors. Other shareholders included such persons as John Thomas Bigge, Sir Charles Cockerell, Richard Hart Davis, Henry Porcher and William Wilberforce. Walter Stevenson Davidson, a man with a lifelong association with colonial enterprise, emerged as its largest shareholder. From the 1820s until almost 1870 Davidson would be influential in reshaping the company's destiny. 

 

      Such control of shares entailed effective manipulation of voting patterns at annual and special meetings of shareholders. Voting power was related directly to the number of shares held, as follows: for 10 shares and less than 30, one vote, for 30 shares and less than 60, two votes. for 60 and less than 90, three votes. for 90 and upwards, four votes - and no more. No shareholder could exercise a vote in proceedings without a nominal stake of £1000 in the corporation. 

 

      The composition of the original Court of Directors epitomised the British character of the Australian Agricultural Company. The Directors, responsible for long term planning and the organisation of finance, needed a close association with the sources of capital for the venture, especially with their shareholders. Major early progress would hinge on the ability of the Directors to persuade investors to provide the substantial capital needed in the expensive and unprofitable establishment years. The original Court of Directors represented mainstream British enterprise. 

 

      John Smith was first Governor of the Court of Directors. William Manning, M.P. for Lymington, County Hants, was Deputy Governor. Both men exercised four votes. They were both members of Parliament, as were another six of the original directors and two of the auditors. In all, 30 shareholders in the June 1826 List of Proprietors were M.P.'s. The Bank of England was strongly represented on the Court through its Deputy Governor, John Baker Richards, and five of its directors: William Manning, David Barclay, Timothy Curtis, George Warde Norman and Henry Porcher. The East India Company was similarly placed with five representatives among directors. Stewart Marjoribanks, brother of the East India Company's deputy chairman Thomas Tooke, of the firm Stephen Thornton and Co which boasted as a partner Mr Astill, Chairman of the Indian corporation; Robert Campbell, John Loch and John Ravenshaw were directors. An impressive number of British banking and business firms in addition to the above were represented on the board. These were Bazett, Farquhar, Crawford and Company. Herries, Farquhar, Haliday and Company, Paxton, Cockerell and, Company Coutts and Company, the West India Docks and the Board of Ship Owners. 

 

      This was, by any standards, an impressive array. It was the first use of the London capital market to finance pastoral and mining operations in Australia. The City of London was beginning its long tradition of investing capital to exploit Australian resources. Through joint-stock venture the classical theory of land, labour and capital was being applied to a colony bereft of risk capital and skill but enjoying both conditions of climate and soil favourable to wool production and possessing coal deposits close to an accessible harbour. Much of Australian history can be analysed and interpreted around the changing perception of the gains and losses contracted by this mutual relationship. 

 

      The A. A. Company was heavily British in its major aims. Its pastoral enterprise focussed on producing fine wool as a staple export to British woollen mills. Its coal venture aimed primarily to export coal to the East India Company. An immediate response is to see the company as a British capital Investment corporation established to rape and irresponsibly exploit colonial resources. This claim was made by colonists as soon as they received news of its formatlon. It has been repeated frequently.     

 

      Detailed description of the practical experience of the Company between 1824 and its restructuring in 1853 will provide one line of evidence against which to test this claim. It is necessary, however, to examine the theoretical aims behind the Company's formation. The question is complex. One must keep in mind Commissioner Bigge's recommendations and the active role played in the powers granted to the Company by the Colonial Office. 

 

      The reports of Bigge were the essential background to the Company's formation. A first principle behind the initial moves was that any pastoral company would be immediately committed to considerable expenditure in feeding, clothing and housing a large convict labour force. This labour force was the linchpin of formation. Without the guarantee of this convict labour force Smith and his colleagues would not have committed their capital and interests to the Australian scene. In return, the Colonial Office guaranteed the assignment of this labour force. It was this mutual contracting and undertaking of responsibilities which was the prime consideration.

 

      The Company undertook to send out to New South Wales competent, free persons with experience gained in the British and Continental woollen industry. These men would act as agents and overseers to employ and train convicts as skilled pastoral labourers and quality shepherds. In addition, through the establishment of schools and churches, it would undertake the educational and moral improvement of the convicts assigned to its estate. Thus, in return for receiving the services of an undoubtedly large labour force, the Company undertook to make them useful citizens of the emerging colony.  

 

      The Company also committed itself to sending out from Europe people with skills in sheep management and experienced in classing and preparing shorn wool for the London market. With a pastoral industry still basically geared to the growing of meat these were needed skills. The Company guaranteed to diffuse this useful knowledge throughout the colony. In brief, the Company's pastoral operations were designed to promote Bigge's system of rural industry necessary to establish New South Wales as a free and economically viable society. The A. A. Company was designed to play a major role in fostering a wool growing and pastoral economy. 

 

 There can be no doubt that the Company was given exclusive favours, particularly in its land grant. Set against the Australian mainland mass of 2,941,526 square miles it may not now seem a significant portion. By contemporary standards it was massive. Captain Macarthur, one of the largest landholders, was still in process of acquiring his 60,000 acres in the Camden district. William Lawson, an equally important pastoralist, held some 200,000 acres in various districts. These men were the exception. Many of the free settlers who emigrated to New South Wales received initial grants of 2,560 acres which could be enlarged by purchase after 1825 to a maximum of 9,000 acres. A free grant of 1,000,000 acres was far in excess of the accepted estates of the 1820s. 

 

      The figure of one million acres had a long history. In 1803 when Macarthur had put forward his Statement of the Improvement and Progress of the Breed of Fine Woolled Sheep in New South Wales, Sir Joseph Banks had recommended that a million acres be conditionally granted to the proposed company. This figure was based on the calculation of one sheep to one acre. It seems reasonable in view of the role played by John Macarthur junior, to suppose that the earlier submissions and comments were recovered from a dusty pigeonhole and used in preparing the later "Proposals to Government". 

 

      The grant was large. At the same time, Bathurst guaranteed it would not be used as a speculation but developed for the dual purposes of helping both the Company and the colony. The Company was committed to the payment of quit rents on the land and was held to a specified period of non-alienation as well as to carrying out major improvements. Given the colonial economy there were few options to government in guaranteeing responsible land use. Development by a corporation held to strict conditions was desirable.  

 

      Bathurst's concern for responsible and beneficial operation was repeated in the agreements on the coal venture. It was recognised investment of capital and skills in the primitive coal industry would be an undoubted boon. First of all, the mines were only leased; the rent was fixed by the Colonial Office. The price of coal was fixed by a mutual agreement between the Government and the Company and, if disagreement existed, was open to independent arbitration. Various escape clauses favourable to Government guaranteed the Company's responsible operation. 

 

      It would seem, then, that for the early decades, when the terms of the Royal Charter and specific agreement spelt out varying contractual commitments, the Company was held, in theory, to a responsible and non-exploitative mode of operation. These commitments were assured by Bathurst and a Colonial Office charged with guiding a prison society to a free enterprise economy. Even if it be admitted that Bathurst guaranteed that the colonial situation would not be exploited in an overt way, was this necessarily the original intention of the Court of Directors before the submissions met the paring knife of the Colonial Office? 

 

      Bigge had warned that although persons who embarked on pastoral enterprises might reasonably hope to reap great benefit in time, he was cautious. He was convinced, they would, in the first instance, be accompanied by great personal sacrifices and the returns of capital would be slow and distant. This was scarcely the type of bait to attract foolish speculators intent on making fast profits. 

 

      Does the same conclusion apply to the mining venture? Even if Smith and his colleagues committed capital to develop the colonial coal industry with the full knowledge of concomitant responsibilities, how does one account for their desire to mine all other minerals and metals such as iron, lead, tin, copper, silver and gold? Its proposers must have known this had no chance of being seriously considered. Either the Court of Directors was pushed by the East India Company representatives or the submission was used as a political ploy to obtain ready approval for the coal venture. As the point was not persisted with, the latter conclusion is more probable. 

 

      In sum, these respectable, conservative City of London merchants and bankers viewed New South Wales as a promising field for investment. They took the long view, gambling that ultimately they would receive ample returns. They also understood that their investment would encourage growth in the infant colony as a priority ahead of declared dividends. Colonial Office personnel held similar ideas. They designed the firm's charter to facilitate New South Wales economic growth.  

 

      As soon as formal approval was given for the wool operation the General Committee of Management began the logistical task of equipping their first ships for New South Wales.

 

 

 

 

 

 

CHAPTER 2 SETTLEMENT AT PORT STEPHENS

 

Robert Dawson, Agent of the Australian Agricultural Company, stood on the deck of the York approaching Sydney Heads on 13 November 1825.1 As he scanned the harbour, Dawson thought back to the time over a year previously when he had been approached to become Agent and ahead to the next few years when the emerging, raw colony of New South Wales would present challenges and experiences quite unlike those of past years in England. 

 

Robert Dawson was 42 years old. He had been born at Great Bentley, Essex, the youngest son of Joseph Dawson. He was educated at Lindsay's Grove Hall School near Bow, whence he returned to Essex to farm his family estate. Married to Anne Taylor, Dawson remained at Bentley Lodge until 1821 when an agricultural depression forced him to Berkshire where he managed Becket, the estate of Viscount Barrington. He was working at Becket when young John Macarthur sought him out and asked him to become Agent. Dawson's testimonials were strong: he was known and respected as a man of integrity, prudence and sound judgment. Years of practical farming had developed skills in agriculture and taught him the importance of proper business habits. Such qualities, Macarthur knew, would be essential in the man selected to shape the destiny of the Company. On the more personal level Dawson was known and respected for his even temper and strict attention to his parental and domestic duties. He was closely attached to his wife Anne and daughter Ellen. As he approached Sydney Cove Dawson reflected on the factors of distance and time separating him from his loved ones. He realised one of his first tasks would be to build a house in the Australian bush and prepare a domestic haven for Anne and their four' children. Once his family joined him he would be able to establish a cosy hearth as a solace from onerous duties. 

 

Dawson's experience in agriculture had also given him some of the blunt-mannered qualities so beloved of satirists like Henry Fielding. Although his manner was somewhat abrupt he never intended to give offence. Indeed, the shrewd businessmen on the Company's General Committee of Management had frequently been gratified by Dawson's frankness and his readiness to receive advice. 

 

Dawson's arrival was followed two days later by the second chartered vessel the Brothers. After landing the stock and moving them to the Government Domain and the adjoining stables, Dawson familiarised himself with Sydney. 

 

He entered a colony passing through a period of transition. Since 1821 important changes had occurred. Sydney with a population of about 12,000 presented a confident face to the world. Parramatta, Liverpool and Bathurst were quickly becoming respectable towns. Port Macquarie had replaced Newcastle as the secondary penal station and Newcastle, because of its geographical location and coal, seemed destined for greatness. In every direction from Sydney the country was being cleared and the roads, for some distance, were well made and well kept. Free settlers had arrived in increasing numbers. Many, with capital resources, were taking up land grants in the Hunter Valley. A pattern of expansion north of Newcastle and Bathurst and south of Camden towards Goulbum and the Monaro had occurred over the past year. 

 

Colonial society was stratified according to role, status and background. The autocratic powers of the early governors were being reduced by a newly created Legislative Council and a soon to be inaugurated Executive Council. Governor Brisbane presided over the Legislative Council, initiated legislation and retained the power to issue ordinances contrary to the majority will, provided one councillor supported him. The Charter of Justice, investing the Supreme Court of New South Wales with the same status and jurisdiction as the King's Bench, had been opened in 1824. It was presided over by Sir Francis Forbes, Chief Justice, who was invested with check-rein legislative functions. He was assisted by government legal officers such as a Solicitor-General and an Attorney-General, as well as an elaborated system of lower courts including Courts of Quarter Sessions. Transportation and the assignment system were accepted facts of life but socially, the clash between emancipists and "exclusives" was bitter and intense. This serious split between the Macarthur led exclusives, many of them shareholders in the Australian Agricultural Company, and the emancipists whose cause was being articulated through The Australian newspaper of William Charles Wentworth and Robert Wardell, would have grave consequences for Robert Dawson. 

 

Dawson's initial contact with Sydney brought recognition that his success would depend upon relations with the Aborigines and on his ability to manage convicts assigned to the Company's labour force. These two groups, lowest in the strata of colonial society, would be in constant contact with Dawson and the recently arrived immigrant employees. 

 

Robert Dawson's attitude to the Aborigines emerged quickly. It was in marked contrast with the standards of the day. He had many chances to see the fatal impact being made on Aboriginal society by British settlers who were ruthlessly dispossessing them of their hunting grounds and destroying their sacred sites. Dawson knew that the customs and culture of the Aborigines were so little known, even amongst officials in Sydney, that the most absurd stories were sometimes circulated and believed. This general attitude wrung from Dawson's heart the sad realisation that whenever the colonisation of a country is commenced In the usual way, no means can be devised of preserving indigenous societies from final destruction. In spite of this grim assessment of the situation developing between British colonisers and Aboriginal cultures, Dawson was determined to do the utmost to better relations between the two groups. 

 

Robert Dawson's enlightened approach to the Aborigines alerted him, in turn, to that other, often despised, group of men: the emancipists and convicts. As New South Wales emerged from a strict gaol to an agricultural and pastoral society founded on assigned labour, these men were being employed in the bush as shepherds, cedar cutters and mechanics. They came in frequent contact with the Aborigines as the frontiers of settlement pushed out from the Cumberland Plain. Dawson believed many of these men had been brutalised by the harsh conditions of the convict system and would respond in time to humane, but firm, direction. He detected in many an obvious desire to reform and to carve out a new life. 

 

Dawson was especially concerned about this group because of his official position. The Company's success would depend on the working relationship established between management and convicts on its pastoral estate. Dawson knew that within a very short time he would have ultimate charge of 1400 convicts. His strong sense of humanity soon made him aware of difficulties associated with the post-Bigge convict system. 

 

From the moment of landfall in Sydney Robert Dawson recognised the need to work closely with the local Colonial Committee appointed by the London Court of Directors. During planning discussions the Directors had foreseen the need for efficient management. They realised in particular, that the Agent would need the constant advice and guidance of men experienced in colonial conditions. It would not be easy for a 42 year old man, long trained to English agricultural practices, to adapt to Australian conditions. They appointed a committee designed expressly to aid Dawson in decision making and to control expenditure. 

 

Pending Dawson's arrival, a Sydney headquarters had been established by leasing from the Bank of New South Wales in Macquarie Place, the former Mary Reibey building. In February 1825 Thomas Cudbert Harington was hired as local secretary to maintain the office for the committee which had, by force of circumstances, been reduced to three men, James and Hannibal Macarthur and James Bowman.   It dominating influence of Captain John Macarthur.was as its critics alleged, a family,committee of young men under the Good relations between Dawson and this committee would be crucial during the foundation years. Although Dawson became known as a fair and humane man by those who worked under him, his relations with men of power and position were to pose difficult problems. Notorious even among such company was John Macarthur. Macarthur had long since exemplified Governor Hunter's early assessment of him as 'being of a restless, ambitious and litigious disposition'. Since his return to New South Wales in 1817 Macarthur had, perforce, confined his activities to pastoral and agricultural affairs. 

 

The launching of the A. A. Company was interpreted as a naked contrivance to further Macarthur power. Some persons thought that such a large corporation would not only aid such established pastoralists but would entail the inevitable destruction of the industry of the smaller pastoralist and farmer. It was in this context that Dawson was to meet problems which would severely test his powers. On the level of personal contact with his committee of management Dawson would face many tangled administrative troubles. The passage of time would bring these factors to the surface. In the beginning, relations between the Agent and his committee were harmonious. All three members were interested in pastoralism and possessed of some business acumen. 

 

James Macarthur, fourth child and fourth son of John and Elizabeth Macarthur, after education and travel abroad, had returned with his father in 1817 and devoted himself to administration of the family's expanding estates. As chairman of the Company's colonial committee he could channel the fruits of the experience to Robert Dawson and advise him in building up the agricultural estate. Hannibal Macarthur, cousin to James, had accompanied his uncle, Captain Macarthur, on the tetter's return to New South Wales in June 1805. He engaged in various trading and farming activities, helping Elizabeth in breeding-up Captain Macarthur's crossbred merinos during the tatter's long absence from the colony, 1809 to 1817. Hannibal's farming, pastoral and business successes were considerable. James Bowman, third member of the committee, had succeeded D'Arcy Wentworth as principal surgeon, Sydney Hospital. His marriage dowry to Elizabeth, second daughter of the Macarthurs, included 2000 sheep and 200 head of cattle and facilitated acquisition of his large estate Ravensworth in the Upper Hunter Valley. Aided by a committee with such experience, Robert Dawson was confident the Company would prosper. 

 

Dawson's known qualities of fairness and humanity matched a determination to succeed. He faced tremendous tasks. With no experience of colonial conditions, Dawson prepared to carve out of the bush a large agricultural estate geared to the production of fine wool. It would be his unenviable lot to find pastoral lands for large numbers of sheep, cattle and horses, to prepare land for the cultivation of maize, tobacco and potatoes, and to erect dwellings and stores for numerous convicts. He would need to test the suitability of soils and pastures for the introduced stock. One of his most important tasks lay in the breeding tests between colonial stock, to be purchased in the colony, and the stock arriving from England and Europe. It was a daunting challenge. 

 

His confidence and determination were grounded in the provisions already made in the major areas of capital, livestock and workmen. The establishment of the Company represented the first significant inflow of British capital. Capital was a factor needed to enable the colony to grow. The Company would advance plans to make the growth and export of merino wool so large and important as to attract public attention and be an object of the highest national consequence. With the advantages of large capital and a grant of one million acres, wool exports to British manufacturers would increase materially. 

 

A second reason for confidence lay in the quality of imported stock. On board the York were twelve Anglo merino ewes as well as fifteen rams, four lambs and 313 merino ewes from the south of France. The Brothers, contained a similar cargo of 204 French merino ewes, 167 Anglo merino ewes and fifteen French rams. A loss of only eighteen sheep on the voyage was an achievement at a time when near total losses were still being experienced. Robert Oawson also brought new breeds of cattle and horse. The York carried one Durham bull and cow, one Scotch Highland bull and five Scotch cows. These were the finest specimens introduced by 1825. They were valuable and very superior in quality. The Brothers also contained three Cleveland and four blood horses. The introduction of the Cleveland horse met with decided approval. The great Durham cow and bull could not be matched in the colony. John Thomas Campbell, a gentleman of some consequence, said he would go on foot any day to see such a cow as the large Durham. The quality of these animals contrasted more than favourably with colonial stock. 

 

  At a meeting of the Agricultural Society at Parramatta the previous year the best of the colony's stock had been on display. Horses, cattle and pigs were equal to any seen at county fairs in England. Although a finer collection of stock might be exhibited at Holkham or Woburn, the beauty of form of the Parramatta stock was striking. Yet the new breeds of Durham cattle and Cleveland horses introduced by the Company were judged superior to other breeds already being raised. The poor quality of Australian sheep was obvious at the Parramatta meeting. There were no sheep of superior quality. For this reason the Company's determination to introduce quality sheep was welcome news. Colonists remarked most favourably on the French merinos landed.

 

Dawson's third reason for confidence lay in his assistants. On the York and Brothers was the nucleus staff of clerks, wool-sorter, labourers, shepherds and artisans for the initial settlement. Two officers accompanied Robert Dawson: Henry Thomas Ebsworth, clerk, and Charles Hall, a wool-sorter from Halifax. Three shepherds with various labourers and artisans made up the contingent. On the Brothers John Dawson, nephew of the Agent.was accompanied by a surveyor, John Armstrong; a Scottish shepherd, Andrew Telfer; and ten other indentured servants. Some of these men were accompanied by their wives and children. They were indentured for seven years. The bulk had been chosen for their expertise and skills. These were the men who would train the assigned convicts in pastoral and agricultural skills so essential for the development of a large estate. 

 

After disembarking, these servants travelled overland in carts and waggons to "Retreat Farm", a 600 acre property leased for temporary use at Bringelly between Liverpool and Macarthur's recently established estate in the Cowpastures. The accompanying thunderstorm did little to relieve their pangs of homesickness but, on arrival they prepared for the transfer of stock from the Domain. After a short period the sheep were taken to Retreat Farm. The cattle and horses were transferred to Elizabeth Farm, Parramatta where Macarthur and other colonists paid to have their cows and mares covered by the new stud stock. John Dawson took charge of Retreat Farm while his uncle tackled his first task: selecting land. 

 

Robert Dawson consulted with the colonial committee. It should have been possible to make a decision on the land by the time Dawson arrived in Sydney. The committee had done all in its power to achieve this decision. Immediately following their appointment they sought the advice of Allan Cunningham and John Oxley. Detailed knowledge of the colony beyond the County of Cumberland was not yet extensive, but was sufficient for the Company's purposes. 

 

After the crossing of the Blue Mountains various expeditions had extended into the interior. Evans penetrated beyond Bathurst and, later, to the Lachlan River. In 1817 Oxley pushed into the Lachlan swamps and the following year followed the Macquarie River downstream until he turned east towards the coast at Port Macquarie. Between 1814 and 1824 men such as Hurne, Throsby, Meehan and Wild extended knowledge of the southern area towards Lake George. During 1823 Currie and Ovens penetrated to the Monaro. The following year Hume and Hovell pushed even further south to Corio Bay. At the same time Dangar was exploring the Upper Hunter eastward of the area penetrated from Bathurst by Blackman, Lawson and Cunningham. By late 1824 knowledge was confined to an area bounded roughly by a line from Port Macquarie to the Liverpool Plains and the line from Wellington to Yass and thence to Moruya. Earlier coastal exploration had touched the entrances to the Macleay and Nambucca rivers. The entrances to such important rivers as the Clarence, Richmond and Manning were largely unknown. 

 

Land on the south coast was rejected because of inadequate harbours while land from Camden to the Limestone Plains was too broken, too varied in soil quality and too European in character. The southern tablelands and Monaro were regarded as ill-suited for sheep and too cold for olives and grapes. Land west of the Blue Mountains was hindered by transport difficulties. Both Oxley and Cunningham favoured the northern area with the Surveyor General specifying land west of the Hastings River and above the Liverpool Ranges at the head of the Upper Hunter. This was land around the present Walcha, Nowendoc, Gloucester region close to Oxleys route six years previously.

Very little was known of this area between Danger's 1824 route from the Dart Brook to the Liverpool Plains and Oxley's route. Various factors favoured this region: the availability of water transport and uncertainty whether the finest wool could be grown on the coast or in the interior. Oxley favoured two grants, one above the Hastings River and the other on Liverpool Plains. Cunningham, viewing the Plains from Pandoras Pass in 1823, judged them too damp for sheep. Although Dangar had travelled out on to the Plains in October 1824, their distance from navigable water on the Hunter was forbidding.

Transport as a factor in the decision was already proving crucial. Rapid occupation of the rich Lower Hunter Valley between 1822 and 1824 precluded choice of a million acre block in this desirable region. These factors led the committee to concentrate on the unknown land between the Scone region and Port Macquarie. Against the background of pastoralism at that time this was a wise decision. There was also every possibility land in the northern region would suit the Company's agricultural operations.

 

The committee had attempted to obtain a survey as early as November, but it was not till January 1825 that Governor Brisbane received the necessary authorisation from Downing Street. Not till July did Oxley give instructions for the survey to Dangar. Henry Dangar was born in St Neot, Cornwall. In 1821 he emigrated to New South Wales where he was appointed an assistant in the Survey Department. After preliminary work in the Argyle and Camden districts Dangar marked out land grants in the Hunter Valley, exploring the Upper Hunter and surveying the township of Newcastle. James Macarthur and Oxley judged him the most efficient surveyor in the colony. In the space of four years Dangar had gained a wide experience of land and Its usage. This had not given him any experience in sheep growing. His advice would be crucial.

Henry Dangar.

 

Dangar was instructed to proceed overland from Scone in a true northeast by east course calculated to place him about twenty miles upstream from Port Macquarie. His return journey on an arc-like route to Port Stephens would cover a course parallel to the coastline some fifteen or twenty miles inland. This would enable Dangar to examine the streams falling into the lakes and inlets discovered by Oxley. He was instructed to examine carefully the country and pastures around Harrington and Wallis Lakes.

 

Between 9 August and 24 September 1825 Dangar surveyed a route between Pages River and the Head of the Peel and thence down the difficult terrain of the Barnard to the coast and Port Macquarie. Mountainous country forced him initially west of the intended route and revealed only small sections of suitable land and pastures enclosed by rugged spurs and ranges. Tall hills obscured any hint of the broad, rich alluvial flats and undulating land downstream on the Peel. The steep, precipitous descent down the Barnard exhaused his horses in the Wingham-Lansdowne region close to what he thought was open pastures. This expectation of suitable land along the Barnard-Manning reinforced a general impression that ample, sufficient land existed between the Manning and Port Stephens. News of Hangar's unsuccessful survey reached Sydney shortly before the arrival of the York but motivated Oxley and the committee to favour the land around Port Stephens.

 

In January Dawson gained first hand knowledge of the Hunter Valley around Luskintyre and then examined the Port Stephens area. Navigable water along the Karuah River to Booral combined with fresh water, supplies of fish and oyster shells for lime-making along a section of the north shore, backed by hills suitable for sheep walks favoured Tarlee-Carabean as an initial headquarters capable of feeding a large settlement and providing ready access to the sea. The site combined harbour, agricultural and pastoral lands, leading the committee to approve and ratify Dawson's decision to prepare huts and shelters ready for the "Retreat Farm" personnel and stock.

 

A transection survey of land to the north by Dangar, Armstrong and Harington revealed good prospects for extensive sheep grazing. Two inspections by Dawson in the south-east section of their survey culminated in his detailed examination and naming of the long valleys between Booral and Gloucester in November. Successful exploration of the Camden Haven and Manning river systems in October 1827, gave an assessment that abundant land suitable initially for cattle, and then sheep, compared more than favourably with the colony's granary lands in the Hunter Valley. Dawson's decision to take all, instead of a part, of the grant in the coastal region reveals not only an English background trained in the importance of salt water rivers close to sheep pastures and awareness of the facility for transport and communication afforded by intersecting waterways but an impetuous nature too trusting in the judgments of subordinates. Neither he nor the committee had personally seen the bulk of the lands whose boundaries were already being surveyed, at Dawson's request, by government surveyors Florance and Ralfe. None of the subordinates who Inspected land had knowledge of sheep growing in the Australian environment.

 

Dawson's impetuosity led him to a hasty decision. Captain Macarthur, fearing a premature choice of land, had consciously restrained the hand of authority by lending from the Company's funds £2000 to the financially troubled Surveyor-General to raise a mortgage on his Kirkham Estate. This loan, a deliberate tactic to keep Oxley friendly, precipitated a crisis in management and administration.

 

In mid-December 1827 John Oxley travelled to Port Stephens with James Macarthur and two government land commissioners for the formal ratification of the grant. After various Inspections and negotiation a formal ceremony took place. It defined the grant within a revised western boundary and a fixed reference coastline eastern limit.

 

The alarming state of Oxley's health - the constant fear of his dying in the bush -and the need to pay Oxley a personal fee of £2001.5.0 over and above money due to the Governor and Colonial Secretary overrode all caution and determined all participants to proceed with the land transfer.

 

Three years later it was reported that this sum of money was the prime reason for haste in settling the boundaries. In view of subsequent developments, and especially the prompt action in paying the money when Oxley, temporarily in good health, presented his account, there seems little reason to doubt the assessment. There is no way of linking payment of this sum and the discharge of the earlier mortgage. Without doubt, however, Oxley's health and a concern to clear payments hastened ratification of the grant when caution was demanded.

 

This was a fair achievement. If Dawson had built steadily and quietly on this foundation the Company would not have faced crisis at the end of 1827. The root of this crisis can be found in Dawspn's propensity to act hastily instead of planning more carefully and in his uncritical trust in both subordinates and the committee. In particular, he became so preoccupied with the pastoral side of the estate that he neglected the need for very careful methods of accounting and book-keeping to keep track of expansion.

 

In the early months Dawson enjoyed the assistance of Henry Thomas Ebsworth who was transferred to Macquarie Place when Harington resigned as accountant to return to the colonial public service currently undergoing extensive reforms. Ebsworth was replaced by P. L Fell, a convict. In August Ebsworth returned to England. His position at Macquarie Place was taken by George Milner Slade. The full effects of lack of continuity were not felt greatly during 1826 but by April 1827 Dawson was so preoccupied with purchasing stock and establishing new stations that he dispensed with submitting detailed monthly reports to Macquarie Place. While the committee was not expected to attend to the minutiae of administration, general policy supervision should have alerted them to potential trouble when an established, sound procedure was waived.

 

Almost from the day of Dawson's arrival the basic management structure faltered because of the committee's inability to fulfil its role. Both James Macarthur and James Bowman found their own affairs prevented their devoting more time to the Company. If the enterprise continued to expand at the same rate there would be need for persons who could devote undivided attention, not only to the direction but also to the inspection of the differing undertakings. All the committee, including Hannibal, were finding this role beyond their resources.

 

As early as September 1826 the basic principle of close co-operation had foundered through the inability of the committee to fulfil its obligations of oversight and advice. The Agent, because of unfamiliarity with Australian conditions and tried pastoral methods, his preference for practical concerns and the very magnitude of the task was soon in desperate need of help.

 

This weakness In co-ordination was exemplified In stock management and with the proposed colliery. Dawson's initial confidence lay partly In the quality of Imported stock, especially the sheep. The Macarthur family had achieved fame for experiments with sheep breeding. It was clearly understood that committee advice would be invaluable yet, almost from the very day the Company's sheep were landed and moved to Bringelly, troubles emerged in this vital department. This situation grew worse until late 1827 when all persons realised there was something amiss. Trouble occurred on two levels: amongst the sheep imported and amongst the sheep purchased.

 

Robert Dawson's initial imports had comprised, for the most part, merino flocks purchased in France and England. These were supplemented by subsequent imports from France and Saxony. Two further shiploads arrived in 1826 and four in 1827. On March 1826, the first of the Saxon merinos, from the flocks of Prince Uchnowski of Silesia, arrived under the care of a young man well versed in the animal husbandry techniques and practices of Saxony, William Dutton. The voyage on the Prince Regent had not been without incident: the sheep suffered heavy casualties. Although 25 rams and 218 ewes has been shipped at Hamburg, 7 rams and 35 ewes had died either from faulty penning or scab contracted after the ship called at Van Diemens Land. The surviving sheep, with the exception of 10 which died on landing, were taken to Elizabeth Farm, and later to Retreat Farm. At Bringelly they came once more under the care of Dutton. On 25 July, James White had arrived on the Fairfield with the remainder of the French merinos purchased early in 1825.71 These merinos were transferred to Retreat Farm. White landed 57 merinos out of a total of 79 - the heavy loss being attributed to the condition of the sheep on embarkation from Cowes.

 

No further imports of sheep were received till January 1827 when the Australia brought a contingent of 15 Saxon rams and 202 Saxon ewes. The largest boost took place in late 1827 with the arrival of the Frederick, Marquis of Anglesey and Waterloo . A total of 18 rams and 268 ewes from Saxony as well as 17 rams and 589 ewes from France arrived. The total of sheep landed by the Company during the years 1825 to 1827 was as follows:

 

BreedRams         Ewes  Lambs  Total 

Saxon51                653   43       747 

French Merino       47    1145    1196 

Anglo Merino         179     0       179 

.........................TOTAL 2122

 

Dawson followed approved English practices of placing these sheep on "salt water runs", subject to inundation at high tide. Instead of placing the sheep on the dry pastures north of Stroud, around the Avon and Gloucester river valleys, Dawson kept most near the base of operations around Port Stephens and along the tower Karuah River. Closer supervision of the Agent's actions during these early months would have prevented this mistake which fostered foot-rot - a fairly obvious error for an English sheep man to make without prior experience of Australian conditions. It was the responsibility of the committee to indicate the wisdom of establishing a string of stations along the valley towards Gloucester instead of concentrating the bulk of operations between Carabean and Stroud. This they did not do till May 1827. Even then Dawson did not act on their advice. 

 

A greater failure occurred amongst the sheep purchased in the colony. A close examination of the sheep purchased will enable us to appreciate subsequent events leading to Dawson's dismissal the following year and to substantiate recent conclusions about the nature of the Australian wool industry in the 1820's.

 

The Company had initially planned to import a number of high quality pure breed sheep and to cross them with large numbers of colonial sheep. In line with this policy, 1957 ewes and 417 lambs were purchased during 1826. The following year 5883 ewes, 10 rams and 52 lambs were purchased. In addition 697 wethers were obtained, probably to supply meat for servants. This meant that during its first two years of operations the Company purchased 9016 sheep from colonial stock proprietors. These sheep were purchased from a variety of stockholders in the County of Cumberland, the Hunter Valley and the Bathurst district. During 1826 Chief Justice Forbes expressed serious concern that members of the colonial committee were selling sheep to the Company. Forbes considered this indicated a serious lack of integrity as members of this committee should not have been involved in the doubtful procedure of being both buyers and sellers. Out of the total of 9016 sheep purchased by the Company during these years 2598 were sold by Captain Macarthur, James Bowman and Hannibal Hawkins Macarthur. James Macarthur did not engage in this practice and, in the light of later events, it must be seriously doubted whether he knew of the quality of some of the sheep being sold. John Macarthur sold 184 wethers, 10 rams and 760 ewes; James Bowman sold 440 ewes while Hannibal Macarthur rid his flocks of 1204 ewes.

 

At the time Dawson considered he had obtained a good deal. By the beginning of 1828 he was not so certain. He alleged that poor quality sheep had been sold by James Bowman, a Mr O'Brien and Philip Thorley of Hunter River. Dawson also claimed that a number of old ewes from the flocks of John and Hannibal Macarthur, purchased in January 1827, had died since the lambing season in the autumn. Although seemingly sound on arrival at Port Stephens these sheep had quickly deteriorated when lambs began to suck them. Dawson concluded that these sheep had died from a disorder which was little else than the concomitant of old age, brought on prematurely by the effect of change in pasturage and climate. 

 

Dawson was dismissed from office shortly after these allegations. This served to sharpen his attacks npt only against the Macarthurs but also against all the old settlers, exclusives and emancipists, engaged in pastoralism during the 1820's He claimed that a buoyant market for livestock existed in the colony between. 1820 and 1828 and it was created by the inflow of immigrants and the ready availability of capital. This market created an ideal situation for the older settlers to sell all their aged, culled and diseased sheep.

 

These charges must also be seen against the background of recent conclusions about the nature of sheep raising up till 1828 or even later. If Dawson's claims were correct it would seem that such profits as were made in sheep farming during the 1820's came from the sale of sheep to immigrants by the original owners, whose false claims concerning the profitability of sheep farming attracted the immigrants to contemplate a pastoral life. Is Dawson's suggestion of a virtual conspiracy by the older settlers little more than a preposterous accusation, an attempt to malign those who brought about his dismissal in 1828? 

 

We are now in a position to substantiate Dawson's allegations. In 1832, for reasons which will be examined below, the Company conducted an exhaustive and detailed examination of its flocks. This Report concluded that the Company, during 1826 and 1827, had purchased a large number of old and rotten sheep. The Report's analysis was essentially a run by run examination of all the sheep on the pastoral estate. It confirmed the allegations being made by Dawson at that time, and earlier, that he had been tricked into buying aged and diseased sheep. The Report does not identify the persons who sold such stock to the Company. In view of the large proportion of the total purchases obtained from Captain Macarthur, James Bowman and Hannibal Macarthur and the specific allegations later made on this matter by Dawson to James Macarthur there can be tittle doubt that the tradition, long persistent in the Company, must be considered reliable.  All the evidence points to the substantiation of Dawson's earlier claims.

 

The Report leaves little doubt that there is every reason to accept Dawson's strictures against the original settlers and to conclude that it was not until the early 1830's that New South Wales wool began to achieve any marked increase in quality. Dawson had hoped that his cross-breeding of high quality English and continental sheep with colonial stock would achieve this end. This conclusion tallies with recent evidence that there was no great demand for Australian wool between 1819 and 1822, and not even, perhaps, as late as 1828.

 

Very few pastoralists were producing substantial quantities of fine wool during these years. Most pastoralists were concerned with meat production and stock sales to immigrants and few, if any, were solely occupied with the production of fine wool. The 1832 Report leaves little doubt that the quality of colonial sheep for fine wool producing purposes was not at that time, very advanced. During the two years of its large-scale stock purchasing activities the Company had chosen from the best colonial stock available. While it is admitted that Dawson was tricked as to their quality, there must be good reason to doubt whether the older settlers had yet developed fine wool producing sheep which could be considered high quality.

 

In 1824 colonial wool was sought for its soft quality and blending character. Little mention was made of its fine wool quality. The evidence of the Company's 1832 Report, the marked improvement in the texture of its clips after 1830, as well as the eagerness with which the Company's sheep were later purchased by colonists, all combine to lead to the inference that the Australian wool industry during the 1820's was basically geared to supplying the local market for sheep - a market created by immigrants and capital inflow, and supplying the local market for meat. The Company soon became a large purchaser of the available stock. These purchases Involved it in the thick of colonial conflicts. The full effect of this involvement must, however, be considered against the background of events between 1825 and 1828. These events were both economic and political.

 

At the time of Governor Darling's arrival the British Treasury had decided to eliminate the dollar currency in the colony by sending out British coins. As the dollars fell in value, they were exported in large quantities, leaving the colony temporarily short of currency. This economic slump combined with three years of severe drought during the years 1826 and 1829 to cause serious distress to pastoralists. While this recession gave Darling an opportunity to introduce stricter governmental control over the colony's banks, It caused many pastoralists, hard hit by the drought, to sell their stock in an effort to retain liquidity. Many of these pastoralists hoped to find a ready market with the Australian Agricultural Company.  The Company's insistence on buying only high quality stock soon brought it into disfavour.

 

This factor combined with an explosive political development to make the Company the object of strong hatred. Darling had become involved in disputes with Chief Justice Forbes, a leading colonial figure, over issues arising from the Sudds-Thompson affair. The effect of these developments on the small colony was fairly predictable. By May 1827 the colony was split into strongly opposed factions. Darling and his staff, including Henry Dumaresq, became estranged from the judiciary led by Forbes. This split was paralleled by the social division between the emancipist faction and the exclusives.

 

As the recession developed during 1827 these social and political factors tended to interlock because of the activity of Dawson and the committee in purchasing stock suddenly put on the market because of the prevailing drought. This had many repercussions. The emancipist faction led by Wentworth, Warded and Hall tended to see the Company as an extension of the exclusives led by Macarthur, his family and Archdeacon Scott. Inevitably, those most opposed to the Company focussed their attention on its stock purchasing activities. James Macarthur regarded the duties of the committee as exceedingly unpleasant because of the abuse cast upon it by every one who made an offer of stock and had his tender rejected. Drought and depression made proprietors anxious to sell. Dawson was interested only in quality stock.

 

At the same time, Darling and Dumaresq, suddenly became very friendly to the Company. Macarthur thought this may have been due to their rupture with Forbes. The Governor and Dumaresq had discovered it was prudent to cultivate a good understanding with .the Company. Dumaresq spoke in very strong terms to James Macarthur of the attacks of the Australian upon the committee. He said Forbes was the open enemy of the Company and made no scruple of abusing and turning it to ridicule whenever opportunity offered.

 

An example of the hostility was seen when the Australian, at the instigation of Forbes, reported a heated discussion in the House of Commons following a speech against the A. A. Company by Sir Charles Forbes. The paper did not then know the vital fact that the older Forbes had later withdrawn his criticism and apologised following a rebuttal speech by John Smith and Wilmot Horton. There can be little doubt that the Company was, by mid-1827, the object of envy and malice as its affairs progressed and as individual proprietors felt the pinch of the 1827 drought and depression.

 

Dawson needed the careful guidance of the committee during these troubled and important months. He was a complete stranger to the cross current of these political events and, consequently, was In danger of playing into the hands of one or more of these factions. This guidance he did not receive. This Inability of the committee to denote needed time to company affairs led to problems with the proposed colliery. The committee accepted responsibility for coal surveys so as to free Dawson for the immediate demands of the pastoral estate.

 

Anticipating a resolution of negotiations in London, the committee engaged John Busby, mineral surveyor, to examine the Newcastle area. Busby's report favoured the opening of new pits,about half a mile southward of the current government pits which should be abandoned. He also recommended importation of a steam-engine and three ton waggons to shift coal from pit head to staiths on the south bank of the Hunter.

 

Further action was delayed pending authorisation by the Court of Directors. Governor Darling's misapprehension that the Company was to have a monopoly on coal mining - an erroneous opinion shared and played on by the colonial press - counselled patience pending receipt of Bathurst's authorisation of a 500 acres grant in July. Discovery that no clause in the charter enabled the Company to operate as traders initially restricted operations to the working of the mines and pit-mouth sales until legal difficulties were resolved.

 

Arrival of John Henderson on the Australia in January 1827 with the colony's first group of skilled miners, an engine-smith, a carrier, a brakeman, a sinker and a collier, made it difficult to continue the waiting game with a still unco-operative Governor. At the end of May, the committee decided, rather precipitately, to break up the coal establishment. Legal doubts about the Company's rights to work coal mines at Port Jackson and Parramatta and opinions that it would be inexpedient to work mines anywhere under existing circumstances were factors in the decision. Reported discovery of a rich seam of coal near the Ganges River in India weakened considerably the original argument for an export trade in coal.

 

These factors were peripheral to the decision. The real reason lay in the refusal of the committee to push the issue with determination and in a reluctance to see the Company enriched in coal mining. Darling misunderstood the original negotiations as one of Sir George Murray's assistants had failed to send out the necessary documents. An interested committee would have gauged this from pushing in discussion all points in the agreement. They were not interested. Correspondence often lay neglected on the desk at Macquarie Place. Instructions from London were not followed up. The committee engaged in deliberate obstruction - by misrepresenting to London Darling's attitude to the venture: not only did Darling wish to retain working of the Government mines but he Impeded the Company's progress. It was alleged Darling delayed giving the Company possession of 500 acres of the coal field at Newcastle. This latter impression was quite incorrect. The committee had never made an application for the grant.

 

The Court of Directors interpreted the committee's failure as a serious dereliction of duty and, eventually, withdrew, collectively and individually, all vested authority. Such a penalty may reflect not only harsh business judgment but suggest an inability to philosophise on how large scale enterprise, developed initially within one set of cultural constraints, can be adequately transferred into a new environment without occasioning drama. There are remarkable parallels between the A. A. Company's early failure and comparable difficulties between immigrant Agent, local personnel and metropolitan head offices in most instances of large corporate activity in lands of recent European settlement.

 

The overwhelming impression one must form from examination of two major problems - selection of land and management - faced during the first two years is that undue haste laid the basis for long term troubles. All these problems resulting from haste could have been avoided if the colonial committee had supervised the Agent's activities more carefully and given him more advice and guidance. Dawson had been expected to do too much with too little assistance. He had chosen land following the seemingly sound advice of the most experienced counsel and had built his initial settlement on proven English practice. Judged against this background It is difficult to avoid the conclusion that Dawson placed far too much trust in his subordinates and in the committee. On the other hand the committee failed seriously to live up to its obligations.

 

The Company had been founded on the premiss of a guaranteed supply of convict labour and during the first two years had received its due allocation. The Company had planned its operations on the model of planting English capital, stock and skills into a colonial environment. The management structure had been planned to ensure the correct adaptation to a new land. But during the foundation period, from the arrival of the York to the definition of the original grant, this linch-pin of proper management was missing. Policy decisions devolved almost totally, upon the Agent at Port Stephens and the Macarthur committee failed seriously in its supervisory function. These first two years of troubles culminated in the dismissal of Dawson, to which we now turn.

 

 

 

CHAPTER 3 THE DISMISSAL OF DAWSON

 

Robert Dawson was dismissed as Agent in April 1828. The reasons are complex but can be pruned to two factors: his failure to implement strict business methods and Macarthur's decision to camouflage shady sheep dealings. The first factor need not have entailed dismissal but once Dawson defied the committee on accounting procedures and expenditure outlays he provided Macarthur with an excuse to engineer his dismissal. For a time Macarthur tried to redeem the situation but then abandoned the corporation to its fate. The Company survived this crisis and endured till the arrival of a Commissioner from England.

 

Colonial New South Wales was, as seen, a divided society, especially by May 1827. The A. A. Company, through stock purchases, was identified with the exclusives. During winter the Company continued to purchase large numbers of stock as proprietors sold to offset prevailing drought and recession. Dawson's inability, through the previous year's breakdown of management, to monitor these purchases, enabled some colonists to trade off old and diseased sheep.

 

The earlier failure was compounded in September when Dawson summarily dismissed William Wetherman, Carabean accountant, for his open criticism of the Agent's management. Wetherman's introduction of a clear accounting system was achieving needed results and should have aided Dawson who was feeling harassed by hasty expansion. Wetherman's dismissal coincided with the need for immediate preparations pending the arrival of three chartered vessels from England with large numbers of personnel and stock. Their arrival in October and November, at shearing time, strained accommodation and fanned discontent. Carabean could not easily absorb 38 employees with at least 23 family groups. In addition, a sudden increase in Saxon and French sheep requiring specialised attention presupposed a well ordered and established sheep department. Instead, Irregular practices and loose discipline prevailed. The clear weaknesses in the management system were now to be exposed.

 

The Court of Directors in London was determined their company would not be another south sea bubble. John Smith, Governor, was the realist. Smith, along with Hart Davis, appointed William Barton as colonial secretary/accountant to control expenditure. Barton arrived at Macquarie Place in November. He quickly instituted a close evaluation of the accounting system, as well as a detailed examination of the sheep department.

 

James Macarthur's express concern over sheep resulted from his second visit. Something was obviously wrong in this vital sector. Dawson admitted this. He would decline further purchases of ewes pending tests of climate and soil. In particular, he had now decided to move all flocks away from Port Stephens and extend a line of stations northwards from Stroud towards the Gloucester and the Manning rivers. This decision matched concern expressed by Captain Macarthur over rapid and unconsolidated expansion, occasioned by purchase rates exceeding the firm's ability to care for and superintend the sheep. For this reason Macarthur declined to sell sheep to the Company in 1828. He looked forward to the arrival of John Dawson at Camden to observe the Macarthur management system which he believed would benefit the Company. Macarthur's concern reflects a harmonious relation with the Agent. This relationship was to be sundered by events later in the month.

 

Barton's brisk efficiency, combined with James Macarthur's worries following his inspection at Port Stephens, led to a flurry of activity at Macquarie Place. A review was proceeding calmly until a detailed, and candid, report by Dawson was submitted on the last day of the month. Prepared in response to questions posed at Carabean by James, it marked a turning point in relations between Agent and committee. Allegations about poor quality sheep touched upon an issue which would have wide repercussions but, for the moment, Dawson's judgment that his earlier report on 1 December had fully appraised the management system, courted a strong reaction. This was the very point at issue for James. The committee now had ample cause to wonder whether Dawson appreciated the need for change in the management system.

 

An accompanying letter raised further doubts about the Agent's judgment. Dawson queried the lack of official explanation for the committee's failure to proceed with an advised purchase from Captain Macarthur. Recent occupation of the Telligherry district and assigned convict allocations made this the most opportune moment for expansion. The committee, at this stage, simply tightened administrative processes so as co-ordinate all correspondence between Agent, Macquarie Place and London and passed a series of resolutions indicating concern for continued expansion and improvement of operations. In mid-February Barton informed London that James Macarthur, soon to accompany the Camden Park wool clip to England, would take to the Court the committee's views on financial expenditure, management arrangements and stock supervision. There was no serious dissatisfaction with the Agent. With Macquarie Place supervising expenditure cutbacks and curtailing expansion, current anomalies in management and efficiency would be corrected.

 

Dawson's subsequent response to a committee minute strained to the limit the relationship between the Agent and James Macarthur. Not only did it cause James to wonder whether Dawson yet appreciated committee worries on the sheep department but it cut across the relationship between James and his aging father. James was caught between his official role as chairman and his sense of filial loyalty. Dawson's earlier allegations about sheep sold by Captain Macarthur and Hannibal must have brought home to James the difficulties of his dual role but Dawson's latest letter placed him in an awkward situation. (His father wished to sell more sheep to the Company at a time when James was certain none should be purchased until all previous endeavours had been consolidated.) Dawson stated he did not consider his correspondence with Captain Macarthur relating to the inspection of Camden Park sheep as official because no formal tender had been offered. It had not been till after his return to Port Stephens towards the end of 1827 that Dawson received a note from Macarthur saying he would offer three flocks. John Dawson had travelled with James early in January 1828 to Camden to inspect the sheep. Soon after their arrival James informed the young nephew of the Agent that he, as a member of the committee, objected to any more sheep purchases during 1828.

 

In retrospect the confused situation on the pastoral estate made James quite worried about the rate of current progress. He realised the need for a reassessment of the management situation, especially the heavy sheep losses. It was this concern which led to his activity at the Macquarie Place Office. It was this concern which led him to object to any more sheep purchases. It is doubtful whether James yet appreciated the correctness of allegations about the sheep sold by his father and cousin, but he must have wondered.

 

James felt keenly the delicacy of his situation. Should his business and managerial judgement submit to the domineering influence of his aging, sick and unpredictable father. James, still a young man, was cutting his political teeth. He had not yet acquired sufficient cunning and skill to content with so formidable an opponent as his own father. Being human he opted for the safer procedure: Barton reminded the Agent that James Macarthur invariably declined entering into any communication with him on the question of sheep, referring him always to Captain Macarthur. James flatly rejected a claim made by Dawson that he had received information from himself on the possibility of Camden Park sheep being made available during the latter half of 1827. Dawson knew James' denial to be incorrect and protested strongly to this effect. By then the situation was changing rapidly. The causes lay in a meeting held on 27 February.

 

On that day James Macarthur and James Bowman met with Barton. Hannibal Macarthur was absent. After dealing with routine matters the committee considered Barton's report of 14th January on the future management of accounts. The committee decided to adopt Barton's proposals and ordered him to send a copy of the submission to Dawson for his information and to James Ebsworth for his guidance. The committee then considered a report submitted on Wetherman's plan for the accounts department. Barton was fully convinced Wetherman's proposals were designed to perform the important function of keeping efficient and orderly accounts. If Wetherman's plan had been allowed to operate effectively, accounts would not have been in a state of confusion. Barton was convinced the Company had benefited from Wetherman's appointment and suffered from his sudden removal. The meeting was moving into a delicate area. The committee resolved that Wetherman be retained in the Macquarie Place office. The committee then considered further routine items. While these matters were being discussed, an encounter occurred in the streets of Sydney. Captain Macarthur met James Ralfe, the surveyor.

 

To assess the full consequences of this meeting we must consider the state of Captain Macarthur's health. Macarthur, after a tempestuous and chequered career, longed for recognition from his contemporaries. His appointment in July 1825 to the newly-created Legislative Council confirmed Macarthur as protagonist of the ultra-conservative faction of pastoralists and merchants and put him in a position where he should have been able to claim this recognition. On the other hand increasing outbursts of erratic temperament had begun to destroy the remnants of his personal authority. This was well known by his family and those closest to him. It is difficult to disagree with Margaret Steven's judgement that Macarthur's domineering and magnetic personality exhibited an apparently impregnable sense of personal superiority, but his arrogance concealed an anxious insecurity that contributed to unscrupulous behaviour. These personality problems eventually gained control of his tormented mind. Any contention in which he was involved released an uncontrolled vindictiveness, paraded in his boast that he had 'never yet failed in ruining a man who had become obnoxious to him.  It was this side of Macarthur's personality which was touched off by meeting with James Ralfe.

 

Ralfe and Dawson had previously been in conflict. After tracing a section of the eastern boundary of the grant Ralfe had returned to Carabean for provisions. Here he violated a rule of the settlement by shooting birds for the Worimi Aborigines. Dawson, indignant over this breach of discipline, ordered Ralfe to Sydney. Dawson followed this reprimand with a complaint to Oxley. Oxley forwarded the letter to Darling. The Governor issued Ralfe a severe reprimand and ordered him to return to survey duties. Ralfe was furious at the procedures adopted. This was the man who now met Macarthur.

 

Macarthur inquired generally about Port Stephens. Macarthur became so alarmed that he rushed to Macquarie Place and advised the committee to call Ralfe. Ralfe came and gave a factual account. He described how, on 9 January, Dawson had commenced construction of a large house. It constantly employed from 30 to 40 men. This building, later known as Tahlee House, had been raised five feet when it was discovered cellars had been omitted. Dawson ordered the structure to be taken down. Cellars were dug and construction recommenced. Not only was such construction expensive and wasteful of labour resources, but it was expressly forbidden without approval of the committee.

 

Raife described how a Manning River settler had been supplied with articles from the Carabean store. He described how emancipists were employed at high wages. He stated the settlement was in a general state of unrest. The committee, thoroughly concerned, examined other employees then in Sydney. The general picture was confirmed. Dawson's time was now measured. Not only had he placed James in an awkward situation apropos sheep purchases, but he was showing complete lack of due economy and effective superintendence. The news could scarcely have come on a worse day - on the very day the committee evaluated the accounts' system.

 

Dawson was now facing a crisis. He would need to defend his actions fully. On the following day, 28 February, Robert Dawson received news of the death of his daughter, Ellen, in England. Dawson recoiled into a period of withdrawal. Thus he failed to co-operate to the committee's satisfaction. This failure was crucial to his future. The next day, 1 March, a special meeting of the committee was held at Parramatta. Taking into consideration Dawson's reports and related documents, the committee felt there was a great deficiency of information. This factor, combined with various alarming reports received on 27th February, led to an important, but fair, decision. Dawson was called upon to give a full explanation. The months of February-March were critical. Upon Oawson's explanations would hinge future prosperity. Dawson was requested to proceed, without delay, to Sydney with stock book, letter books, journals, diaries and other papers.

 

Dawson, by now, seemed aware of forces gathering against him. While the committee prepared further incriminating evidence Dawson made an unwise but understandable decision. He declined to attend the Sydney meeting. He would give no verbal information except at Port Stephens. At this stage the committee determined he was expendable.

 

Dawson's action was that of a man playing for time. He was vulnerable on lack of proper management in the sheep department, lack of due superintendence of convicts, lavish allocation of labour resources and the hasty dismissal of Wetherman. Dawson was convinced, however, that given due process, he could explain the current state of affairs. The answer lay in lack of proper management and due consultation between the Agent and the committee. Given a pioneering situation and understandable initial errors, there was still time to redeem the position. This was a fair assessment if taken at face value. However, it ignored the changing attitude of the committee towards the Company caused by the unpredictable behaviour of Captain Macarthur. It was late days for Dawson. He did not properly realise it. On 13 March his fate was sealed. That day a friend warned him an inquisitorial committee was sitting in judgement on him in Sydney.

 

On 13 March James Macarthur delivered to the committee a long and detailed report. This report was a hatchet operation designed to focus attention on the obvious faults in Dawson's procedures and to shield the committee from blame. In a pamphlet published in 1829 Dawson rebutted most of these allegations and revealed their origin in the faults of the basic management structure between himself and the committee. His strongly worded defence was, however, curiously silent on the disorder in the department of accounts. James' allegations paid particular attention to this question and Dawson's silence can only indicate his refusal to recognise this weakness. Macarthur recommended the suspension from office of the Agent claiming that while he regretted the necessity for this drastic action he felt it was his imperative duty. No resolution was adopted on Dawson's suspension at this stage. The committee, fastened on to those points which revealed Dawson's vulnerability. The committee called a meeting of resident proprietors to confirm their opinions. Dawson, as a proprietor, received notice of the meeting but not in time for him to reach Sydney. He decided to remain at Port Stephens. By this stage, Dawson's presence was not desired in Sydney.

 

On 21 March James Macarthur chaired at Macquarie Place a meeting of colonial proprietors which resolved that a committee of inquiry proceed to Port Stephens. This committee was to comprise John Macarthur, Charles Throsby, John Thomas Campbell, Edward C. Close and Robert Scott. The committee was "requested to proceed, in Company with a member of the Committee of Management, to Port Stephens for the purpose of investigating the state of the Company's affairs, with a view of such measures being ultimately adopted by the Committee as shall then appear to be necessary in order to ensure to the Company the advantages that in the opinion of the Meeting are likely to result from a more efficient System of Management.

 

Between then and mid-April, the committee prepared its case. They wrote to the Court that Dawson's management no longer commanded confidence. The committee shifted the failure fully to Dawson. He, emotionally wounded, was unable to retaliate.

 

Dawson understood the proprietors were sending an impartial committee of inquiry to examine his conduct. Dawson felt he could explain his actions. However, when the committee arrived at Port Stephens, Robert Scott warned him this was not the case. Scott told Dawson privately the proprietors had been induced to agree to a resolution carefully defining the authority of the delegation. It had been so worded as to preclude their entering upon any inquiry into his previous conduct and management, without the consent of the colonial committee. As much as Scott regretted the fact, the deputation had not discovered this defect in their powers until it was too late. They could only look to future arrangements. Dawson's belief that there would be an impartial inquiry was entirely mistaken.

 

On 17 April James Bowman, the Chairman, and the four members of the deputation assembled. Robert Dawson was in attendance. Bowman read through various letters and documents which had passed between Dawson and the Committee, as well as the letters of attorney, agreement and instruction. Bowman then stated that unsatisfactory replies by Dawson and his apparent mismanagement had given rise to the inquiry. Bowman considered that since the arrival of the deputation they had had an opportunity of judging for themselves Dawson's incompetence and wasteful expenditure. Bowman was particularly distressed at the diseased state of some sheep. He believed their visit to more remote stations would show evidence of similar negligence. Then came, to Dawson, the unexpected and extraordinary climax: in order to prevent further mischief Bowman felt it his painful duty to suspend Mr Dawson from that moment from his situation as Agent. No defence from Dawson was heard. Dawson was officially informed in writing of his suspension. He left the estate.

 

Dawson was immediately replaced by Captain Macarthur. This appointment not only amazed the Company's many critics but it disturbed Governor Darling. It supports Barton's contention that following James Macarthur's departure for England on 5 April, at a time when no decision had been taken in committee to suspend the Agent, Captain Macarthur had engineered Dawson's removal and installed himself in the office. Macarthur's appointment was dubious. When Barton notified the change Governor Darling considered the procedures incorrect. He ruled that the committee should have notified the appointment to the Secretary of State for Colonies. Bowman, dominated by his father-in-law, had moved beyond the point of worrying about such technicalities.

 

Macarthur was now in full command. For a time he enjoyed a bout of good health which enabled him to bring a semblance of order to the estate. He issued a reallocation of offices, stressed the need for weekly returns and obtained the appointment of a three man deputation to inspect quarterly the state of affairs. Armstrong began an immediate survey of sheep pastures. To prevent promiscuous intercourse between assigned servants and Worimi women he placed the black's camp out of bounds. Macarthur's reorganisation streamlined efficiency and economy while cutting back on the scale of operation.

 

Macarthur's attention focussed on the sheep flocks and the suitability of the land. An improvement in condition followed removal of the sheep to better pastures and improved supervision. Scab, however, was still prevalent. This had come from scabby rams introduced to the ewes. This reflected poorly on previous superintendence and did not indicate anything about the purchased flocks. Alexander Nisbet, assistant to Macarthur, did emphasise that the purchased colonial sheep varied in quality. This was to prove an understatement.

 

Persistent doubt about the land unhinged Macarthur. Ill-health impaired his judgment: most of the land seemed either barren or inaccessible. Time soon raised important questions. To Darling the formal ceremony on 9th January only needed formal ratification. A Government Order to solemnise the grant was prepared. McLeay asked the committee to nominate a representative to take possession from the Governor. To the utter astonishment of Darling, Macarthur stated he could take no part in the ceremony at least two-thirds of the land was unsuitable. The formal surrender should be postponed.

 

The Company had reached the nadir of its foundation crisis. Macarthur now succumbed to the arduous and demanding task of reformation. Plagued by gout and severe cold he was forced to return to Sydney. His parting assessment was gloomy, extreme disorder prevailed. It was incapable of cure. Most of the convicts were useless. Most of the servants were idle, dishonest or unmanageable. The grant, with slight exception, was a barren waste. Barton could give only a rough estimate of accounts. No written statement could adequately describe affairs. Barton should convey all documentary evidence in the Macquarie Place Office to London and relay to the Court the melancholy state of their affairs.

 

Macarthur envisaged the complete failure of the corporation long encouraged by him to boost settlement and expansion. For many months, lying ill and tortured, he did not care. It was, as M. H. Ellis, recognised, his swansong as an organiser. Macarthur's complete disregard of Dawson's achievements led to a vindictiveness which almost ruined the Australian Agricultural Company. 

 

Barton's assessment differed! It supports the contention that Macarthur was feigning or that his judgment was clouded by ill-health. Barton felt the current crisis lay ultimately in the lack of an efficient system of accounting and supervision. Barton was adamant that the only method lay in introducing a proper system to control expenditure. The anticipated failure of the corporation could be attributed wholly to failures in management. The current state of the settlement evidenced past failures: Carabean was left without magistrate protection or medical aid. Macarthur's return created doubt whether any officer was left to control and direct an establishment of 600 persons. Prisoners were discontented. Indentured servants were inclined to relinguish their agreements and quit the settlement.

 

Barton feared the course the committee might adopt. Prevailing depression conditions might cause them to write off two-thirds of expenditure as inevitable loss. If the selection of the grant was final and the quality of the land as bad as claimed Company hopes were annihilated. Barton did think, however, that the favourable judgements of James Macarthur, Bowman, Dumaresq, Armstrong and the April deputation were more reliable than the adverse opinions of a few hostile employees dominated by John Macarthur.

 

By the end of September Carabean was out of control. The Newcastle police magistrate was despatched to restore order. To help restore order and curtail expense many servants were discharged.

 

In January 1829 arrangements were made for the continued running of the estate. James Ebsworth had been appointed Agent. Barton was nominated as accountant. Wetherman was appointed Carabean storeman while William Harvey took charge of Stroud store. Barton prepared to quit Macquarie Place. In effect, the colonial committee was absolving itself from active policy involvement. This course of action led Jesse Gregson to write in 1907 that "if the object of the Committee had been to bring the enterprise to utter ruin, I do not know what more effectual steps could have been devised than to remove the agent, dispense with many of the employees and throw communications into confusion by getting rid of the Sydney office.

 

Nevertheless, Ebsworth and Barton held the status quo while waiting for decisive action from London to break the impasse. During 1829 a dual situation persisted. Doubts prevailed about the land 61 while a creditable attempt was made to consolidate previous achievements. The Company's survival during 1829 lay in Ebsworth's and Barton's ability to realise on Dawson's achievements and to persist in spite of Macarthur's utter pessimism about the wisdom of such a course of action. This, in itself, demands a close assessment of Dawson's achievements. When news of Dawson's suspension reached London the Court established a Committee of Inquiry to examine the Agent's conduct. John Dawson presented documentary evidence to this committee.

 

The Committee of Inquiry classified under two heads the various complaints against the Agent. These were:

1. The total absence of book accounts or disregard to the Company's interests;

2.  The too great attention to his own interests.

The Committee, after receiving evidence for and against, confirmed the previous suspension. Dawson claimed a right to become agent to his family for the management of estates in the colony. This could not be allowed under the terms of his agreement. His conduct towards the committee and his contempt of their authority was sufficient to warrant  suspension. His culpability could  be  attributed to  inability,  habits of irregularity or other causes.

 

This judgement exacerbates the problem of assessing Robert Dawson's total achievement. Dawson had been hired because of integrity, prudence, sound judgement, skills in agriculture, firm understanding of the importance of proper business habits and willingness to accept advice. His suspension from office was confirmed because he claimed rights beyond the terms of his agreement and defied the committee appointed to guide and advise him. He was held culpable of failure because of inability and habits of irregularity. How can the conflict between promise and performance be reconciled? The key can be found in Dawson's personality: in his even temper and strict attention to his parental and domestic duties and in his romantic personality. The basic trouble lay in Robert Dawson's naive faith in human goodness: he placed too much faith in the recommendations of subordinates but more importantly he trusted the committee set up to guide and advise him.

 

On later reflection Dawson was not so naive. His later judgement showed a very clear realisation: the establishment of the Company was always unpopular in the colony except with those sheep and cattle owners who for a time could make a market of it for the sale of their surplus stock. During this period - 1826 and 1827 - they were interested in keeping it alive. When the Company ceased to afford them a market it became their interest, as well as that of every settler, to strike down the leviathan before it should be converted from a customer into an all powerful competitor. Not only the emancipists but also the exclusives now began to oppose the Company. It was feared the Australian Agricultural Company would inevitably erect itself into a second East India Company and sweep away every smaller stockholder. This political development coincided with the attempt by the colonial committee to tighten the corporation's business procedures. James Macarthur was genuinely concerned to correct faults in management and accounting but Captain Macarthur's unstable condition caused him to give credence to the viewpoint of the Company's opponents: old John Macarthur began to see the corporation as a strong rival to his own interests. Under the force of his influence the attempt by James to make procedures more efficient became little more than an attempt to cut back on the Company's progress, and, ultimately, to abandon it to its fate. In this power game Dawson's trusting personality was no competitor. He was no contender in the society which one old settler later described as a "Colony of Liars". In colonial New South Wales one had always to be on the defensive in common business transactions. Dawson, in this hard-headed environment, was a practical agricultural man out of his depth in a time of political change when the exclusives were battling for positions of power under the enlarged, but still nominated, Legislative Council to be established in 1828. The Company, because of the large injection of capital it was supplying to the colony, provided the exclusives faction which enjoyed social prestige, with a ready market for surplus stock. In this way they were able to increase their economic power and thus, hopefully, their political power in the move towards a more representative Legislative Council. Dawson was unaware of this political dimension in the society around him. He took no part, or even interest, in this side'of life. When, almost unwittingly, he realised early in 1828 that his stock purchasing activities had enabled various proprietors, but especially Captain Macarthur, to make use of him for their own ends, he was caught fast in a situation where only he, and thus the Company, could be the loser.

 

Dawson's achievements had been considerable. Without prior experience of colonial conditions, and with little advice from the committee, Dawson had carved out of the bush an impressive, even if rudimentary, estate. The foundation years proved harassing. [There was little time for relaxation and discussion with his officers. In the initial period of establishing a large corporation, the management and control of men was as important as knowledge of stock, assessment of soils and pastures, and the fostering of sound relationships with the Aborigines. On all these points, however, Dawson's achievements were considerable. The fact that he was succeeding in spite of administrative difficulties to the stage of becoming a competitor with some of the leading pastoralists of long standing is an Indication of this. That his successors were able to consolidate his initial achievements and set the Company on a sound path to long term success also supports this conclusion.

 

Dawson's basic error had been one of hasty development. If he had been wise enough to consolidate expansion and to plan with more forethought he could have avoided subsequent mistakes. It was far more important to test the suitability of the proposed estate before covering it with large numbers of sheep. Not only did this error lead to needless and lavish expenditure but it coincided with the hasty dismissal of his key administrative aide. Dawson realised in September 1827 that it would require immense attention and care to utilise available resources. Why did he ignore sound warnings on basic management principles?

 

Dawson knew that the arrival of Barton and James Ebsworth would facilitate development of a sound management system.69 This probably would have happened if Dawson had pruned his expenditure and had not begun, with our approval, construction of Tahlee House. Why did Dawson begin work on Tahlee House as soon as James Macarthur was out of sight of the settlement? This extravagance was a key factor. The answer lies in Dawson's expecting his wife and young family to join him. By Christmas 1827 this thought dominated his behaviour. It prevented him seeing valid concerns raised by James Macarthur. Praiseworthy attention to parental and domestic duties, strengthened after a long separation, blinded him to the very real concern felt about lavish expenditure. Dawson was out of his depth in appreciating the need for strict financial control of a large corporation. He definitely spent a large sum unwisely.

 

Once he realised the odds were against him, Dawson decided to oppose strenuously the other difficult people with whom he had to deal. This is an understandable human reaction. Evidence was offered that Dawson, understandably disappointed by the hardened attitude of the committee towards him had expressed the sentiment "that should the Company break up it would be a good thing for some of us -and I think I should like to have some of the merino sheep. Soon afterwards Dawson was a proprietor of a flock of sheep at Ratagan on the Hunter River. On the basis of this action William Barton made serious allegations about Dawson's behaviour. This lapse on his part is, in human terms, understandable. It was a minor failure compared with the large scale exploitation of the Company by the exclusives' faction and the lack of responsibility exercised by the committee.

 

For this reason the 1829 judgement of the Court of Directors was incomplete; it was not a full assessment of Robert Dawson's service as Agent. Its terms of reference were too narrow because it was not in full possession of the facts concerning the more basic failure of the management relationship between the committee and Agent. The Court brought down its judgement in January and concentrated on Dawson's failures. Not till June did the Court begin to suspect that its trust in the committee was misplaced. Not till 1832 did it realise the full extent of the deception practised on it. By this time the Court, still highly embarrassed by the outcome of an enterprise which had held such promise, had no desire to re-open the case. There can be no doubt that Dawson's intemperate 1829 apologia, Statement of the Services of Mr Dawson, did not benefit his case in this regard. Dawson knew he had been denied justice. This strong sense of ill-treatment shone through in both the 1829 Statement and his 1831 book, The Present State of Australia. This realisation induced people like Viscount Barrington to take up his case. One must agree with the conclusion that the London Court of Directors, while not prepared to give him justice, was well aware, by 1829, of where the blame lay. Their awareness was indicated by their words 'The misconduct of Mr Dawson is far exceeded in culpability by that of the committee whose orders he was to obey, and by their action in dispensing with this committee before sending out a replacement for Dawson.

 

On the other hand, there was a sound basis for the Court's refusal at this time to re-open the case: Dawson had shown ineptitude in financial management and was out of his depth in handling the affairs of a large corporation. As much as the committee can be held to blame for failing during these early years to keep a closer watch over the Agent's actions, they cannot be blamed for failures in his part. There was a gap in practical judgement between Robert Dawson's idea of what the Company could achieve in the Australian pastoral industry and the means by which this end could be achieved.

 

Sir Edward Parry, successor to both Agent and Colonial Committee, would bring to realisation the hopes of the original proposals.

 

 

 

 

 

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