“History never repeats.”
So goes the song. The New Zealand band were singing about love and hurt but in the world of economics it’s a different story. Boom and bust have long been a feature of the Australian economy and as property prices continue to soar once more across Melbourne, it’s a sobering thought that when it comes to the economy, we never learn from the past.
As UK based analyst Jonathan Tepper recently put it, Australia is now in the midst of “one of the biggest housing bubbles in history.” The old belief in the safety of money in bricks and mortar remains strong in a world where governments print money to lend it on the property market, hoping repayments in another, more valuable foreign currency, will cover their own dubious paper. It’s money making money, the economists’ dream.
In the last post the tale was told of the Plenty River bushrangers of 1842 whose activities up and down the Plenty River valley could be seen as a reaction itself to a down turn in the Colonial economy at that time. Everyone loves a get rich scheme and the Plenty River Bushrangers had one they thought would beat even the property speculators. It all ended in tears for them of course but then, get rich schemes often do.
The recession at Port Phillip in the early 1840s was driven by a combination of economic and social factors. In an all too familiar story, rampant speculation led to an overheated local property market where prices paid for land became unreflective of its ability to produce an income in a rural economy at the bottom end of the world. This, combined with a fluctuating international economy and a corresponding withdrawal of foreign investment, led to Port Phillip’s first financial crisis.
John and Robert Bakewell’s arrival in Port Phillip in 1840 was timed almost to coincide with this crisis but instead of being caught up in it, they turned the situation to their advantage. As Donald S. Garden Wrote in “Heidelberg: The Land and its People”, the story of the land that became Yallambie:
“…was a constant struggle because of the relatively poor quality of much of the land in Portion 8. Nevertheless, where others failed, the Bakewells managed to succeed, both by means of hard work and sufficient capital.” (Heidelberg: The Land and its People, Donald S. Garden, MUP, 1972).
The “profile” which accompanies each page of this blog at left describes Yallambie as having been “first settled in the 1840s” within the “Goldilocks Zone” of Melbourne. However this is a somewhat overly simplified view of history. Although the Bakewells were the first settlers to consolidate a successful farm on land that forms the present day suburb, they were by no means the first to dig a spade into Yallambie’s good earth.
The land that formed Portion 8 at the first land sales of the Heidelberg district was purchased from a Crown comfortable with its concept of Terra Nullius, at a public auction in Sydney in September, 1838 by Thomas Wills for £1067, or £1 2s per acre. Wills was a speculator who had no interest in the property and quickly passed it on to Thomas Walker for £1261, or £1 6s per acre, a profit of almost £200 for holding it for just six months. As previously noted in the pages of this blog, Walker had visited Edward Willis squatting run in 1837 at what is now Yallambie and Lower Plenty, writing about it in his book “A Month in the Bush of Australia,” (Thomas Walker, J. Cross, 1838). It is believed that it was either Wills or Walker who first referred to the land at Yallambie as the “Station Plenty”.
In the latter half of 1839, Walker subdivided Portion 8 into 12 blocks, selling them at a price of between £2 and £3 5s per acre, more than doubling the money that he had paid Willis only months previously. The Port Phillip District was in the middle of a full-fledged property boom, the cannon shot report of which was being heard right around the world.
None of the six purchasers of Walker’s subdivision of Portion 8 took much interest in their holdings and they either sold them again or operated them as absentee landlords. The blocks which today specifically constitute the Yallambie area were bought by just five men: James David Lyon Campbell of Campbellfield, late of the 9th Queen’s Royal Lancers; William Thomas Elliot, a Western Port pastoralist; Nicholas Alexander Fenwick, later to become Police Magistrate at Geelong; and Robert Reeves and Robert Cook.
Campbell’s land fronted the Plenty River on the corner of present day Allima Avenue and Tarcoola Drive, Yallambie. In the midst of the big property bang, it appears that Campbell agreed to sell this land on easy terms to a 24 year old Scot from Fife, William Greig, whose “Farm Day Book” written at Yallambie from October, 1840 to February, 1841 constitutes one of the earliest and most interesting primary accounts of small scale crop farming in the Port Phillip District in the early 1840s. The manuscript, now in the Mitchell Library NSW, illustrates over a five month period the experiences of this naïve young man, very much a stranger in a strange land. A man of good education Greig however had little practical farming expertise of the virgin soils that confronted him or of the unfamiliar climate that came with them.
Greig described himself on the 1841 Census as living at “Plenty” in a completed wooden house containing six people: himself, his wife Marion, his manservant Meikle and wife, and two other people. Greig’s original intention had been to write: “a Diary of daily events on the Farm and any other particular occurrence which may happen I shall confine myself to that,” (Greig, Farm Day Book).
In the end the “Diary” became more than that and is a record instead of all his hopes and dreams and also of the many frustrations he encountered.
It opens optimistically enough on the first day of October, 1840. Greig had just purchased a Van Dieman’s Land plough for 8 guineas and had engaged a team of six bullocks and a driver from the “Scotch Company” at £1 per day to plough his fields while he and two married workmen cleared stumps from: “a nicely lying Flat & two Banks in all about an acre & a half of as good soil as any in the Colony and to surpassed by none in richness in any Country whatever – from which I fully expect an abundant Crop of Potatoes”.
Already Greig’s initial draft of chickens had more than doubled and more eggs were hatching. A garden was started and aside from the potatoes, Greig planted a virtual vegetable Garden of Eden at Yallambie: mustard, cress, cabbages, turnips, peas, carrots, spinach, melons, lettuce, radishes, cucumbers, cauliflower, broccoli and onions.
A pony provided transport to town whenever needed but the hired bullocks kept straying and the ploughing took longer than anticipated. The work was difficult and where the plough missed Greig and his men followed up with spades. The cutting blade on the plough soon broke and had to be sent over to a nearby farm for repair but by mid-October, 1840 the initial work was complete.
On the day ploughing finished, Greig dismissed one of his workman and the man’s wife, “Owing to Jerry again giving me impudence…” When they left, Greig gave “Jerry” a paper stating that he was “a very good workman and an industrious man,” his only fault being his “impudence and a too conceited use of his tongue on all occasions.” Old World class distinctions prevailed under the wide Australian sun where Grieg’s status as an employer and independent landowner placed him, at least in his own mind, on a higher social rung on the sliding scale of a status-conscious 19th century society. Greig was obviously accustomed to hiring and firing servants and was sufficiently aware of his own implied importance to take quick offence at what he termed “impudence”.
By the 23rd October the potatoes were at last in the ground and Greig looked to the future with an “expectation of a good crop.” There were frequent trips to town for supplies, to find a replacement workman for the impudent Jerry and his wife, and to enquire after the post from Britain.
Greig was in actual fact a deeply worried man. In spite of his pretensions to gentleman status, the young Plenty River “farmer” enjoyed only limited capital. He had agreed to purchase James David Lyon Campbell’s Portion 8 landholding with a series of regular payments and the first of these would be due in the New Year. It had been some months since he had any news from home but all the same, Greig looked to the post in vain expectation of a remittance from a wealthy uncle, without whose help he would be unable to meet even his initial commitment to Campbell.
In November, 1840 the first signs of the impending collapse of the Port Phillip colony became apparent and Greig wrote: “Bad accounts from Sydney – some great failures and all business houses in a very tottering state, from the great scarcity of money – in fact the whole colony seems bordering on insolvency.”
Meanwhile work proceeded with fencing the fields while Greig contemplated diversifying his farming interests. He sent his man to inspect some cows, the property of Mr Watson of Watson & Hunter. “I intend starting a dairy if possible and he is inclined to be liberal as to receiving payment it will be always able to bring in something and would with proper management pay itself off in the first year, so I shall make the attempt.”
But to Greig’s disappointment, his man found the suitability of the moo cows a moot point. Only twenty cows in the herd of two or three hundred were satisfactory for a dairy and Greig’s enthusiasm waned, but not before he had already spent money making preparations and purchasing materials for the planned dairy.
On 4 December he wrote: “I am now very dubious as to trying the dairy at all as I am afraid the expense & trouble at this distance from Town is too great to be worth it. I think I’ll get a Bullock team which will bring as much & more money in than 20 cows wd independently of there being no trouble.” The experience of the straying bullocks at the start of his operations was forgotten.
Meanwhile the hoped for income from his potato beds was under threat as: “the rats are playing havoc among the potatoes, going down the drills regularly and eating them up by their very roots, I’ll have to tie the dogs up all night beside them.”
The potatoes had been sown too late in the year to do well. Bushfires played havoc with his land and dogs got into the melon patch. The heat of the Australian summer made him feel quite unwell: “I wish I had a thermometer for I can’t think the heat is far short of 130 degrees at mid day. We feel it terribly in our wooden house.” And “The nights are as unbearable as the days. What crops are in the ground just now must suffer terribly.”
Christmas and New Year passed under a gloom of anxiety. “I am far from being enviably placed now and the great anxiety I am in completely unfits me for everything… With assistance from friends at Home I think I could ensure success, but without that I have nothing left for it but to make the best of my way home. There to begin a world of troubles…”
Still no letters appeared and the horse had gone lame. The diary does not record whether he considered shooting it, or himself. Perhaps he contemplated both. Greig was losing great quantities of meat due to spoilage in the heat and on the 15 February he wrote that he had: “lost half the sheep we killed owing to the weather so that was 28lb of meat thrown to the dogs. I have altogether lost a terrible quantity since being here.”
Finally, after five months the hoped for letters from home arrived (they had been delayed in Adelaide) but there was no money to accompany them.
By the end of February, 1841, Greig was negotiating to rent a house in Melbourne. The last entries for the month, and for the Farm Day Book itself, contain mention of the downturn in the colonial economy and a comment on the government’s policy of selling Crown land at a minimum upset price of £1 per acre. In Greig’s opinion: “a great many will find most of their land not worth a pound.” With this thought, Greig walked away from his 156 acres and out of history. He went into receivership in November, 1841 leaving James David Lyon Campbell to pick up the pieces.
Campbell soon found a ready-made buyer in the form of the Bakewell brothers who paid Campbell £400 for Greig’s farm. The Bakewells had purchased land at the Plenty Station from William Thomas Elliot soon after arriving in the colony and added Campbell’s holding to it, creating a farm that would henceforth be named by them, “Yallambee”.
In the depressed economy of the early 1840s the Bakewells continued to add further holdings to their “Yallambee Park” estate until they owned all of the Portion 8 land north of the Lower Plenty Road, excluding the northern most portion which passed to William Laing, (who developed the now demolished Woodside, later Casa Maria). In mid 1842, the Bakewell’s brother in law and near neighbour, Richard Howitt, visited Yallambee and wrote that:
“The locality is at the commencement of the vast and sterile stringy-bark forests. Part of the farm is consequently almost worthless, and the other by the water-side, of the richest quality.” (Richard Howitt, Impressions of Australia Felix, 1845)
As William Greig fades from history, the question remains, what motivated these men of the pioneering 1840s to travel half way around the world to endure a world of hardship and uncertainty under the harsh Australian sun. Why did so many get caught up in a Port Phillip bubble and allow the financial burden of speculators to be passed on to them, either as lessees or buyers on terms while risking disorientation, depressive anxiety and even existential angst? The answer must surely have been their hope of a better future.
Lynette J. Peel referred to Grieg’s Diary in some detail in her book, “Rural Industry in the Port Phillip Region”, (MUP, 1974) where she wrote:
“…it is quite wrong to assume that these people made a series of sound agricultural and economic decisions in embarking on the life of a farmer. Their optimism and irrational decisions, usually through ignorance of the local situation, undoubtedly did much to fan the flames of rural land speculation before the depression.”
Peel suggests that there is no reason to believe Greig’s story of small scale crop farming at Port Phillip was atypical. Greig had found little difficulty raising easy finance for his endeavour. Including himself, there were three men working his farm, compared to an average of 4.4 recorded for small holdings in the 1841 census but Greig was nevertheless confident in his own ability to succeed provided there was what he termed “proper management.”
Up to the time when the Diary closes, two and often three men had been working on Greig’s 156 acres to produce a one and a half acre crop of potatoes, most of which would be needed for seed the following season. Wages had been paid to the employees, some fences had been built, (although not enough to prevent the bullocks straying), and a garden had been planted. Six chickens had multiplied to 30 but additional meat and provisions had needed to be purchased to supplement what the farm produced, and to feed the four to six adults living there. In retrospect, what he really needed to plant was a money tree.
The inability of Greig through lack of capital to broaden his activities into his pie in the sky bullock team or dairy herd pipe dream meant that much more time would have been needed to make the farm on the Plenty a going concern, if ever. As Peel writes, “…reasonable financial liquidity was essential for flexibility in farming operations.”
The Bakewell brothers later success on the same land on which Greig failed was built partly on their previous farming experience in and around Nottingham, but also on their ability to diversify. John Bakewell worked as a wool sorter in Melbourne while his brother managed the farm at Yallambee, diversifying their interests from the market gardens on the river flat to a cattle herd on the uplands, Richard Howitt’s “vast and sterile stringy-bark forests.”
The pastoral era at Yallambie has long been a thing of the past. Where Greig and the Bakewells once farmed, the land was long ago consumed by the suburban sprawl. Today an average size house from the A V Jennings’ era on an average size block will set you back upwards of seven hundred thousand dollars. A house in the newer “Streeton Views” estate might cost even more. And Yallambie by all reports is one of Melbourne’s more “affordable” suburbs. All over Melbourne come reports of the million dollar mark being crossed at auction, sometimes several times over.
Where this is all leading remains worryingly unclear in the first half of 2016. Like the Emperor’s New Clothes, nobody wants to really say what we have all been thinking about Melbourne’s property scene. At the time of writing this post I have just returned from visiting a much loved sister who for two decades has lived and raised a family, together with her American husband, in one of the better neighbourhoods of Atlanta, Georgia. Their large and very fine home I am told is worth something over USD$400,000. However, if they had ever thought of living in Melbourne again, they have quite dismissed the idea as being impractical. As my brother in law told me, “We would need over $2 million to live in a house like this in an Australian capital city.”
Meanwhile, like the Port Phillip bubble of 1840, Melbourne’s property balloon keeps expanding but with as yet, no sight or sound of anything going pop. Don’t look now, but is that Adam Smith with his eyes tight shut and his “Invisible Hands” placed firmly over our collective ears?