The second half of the nineteenth century witnessed an unprecedented boom in global trade and commercial activity, and Scotland played no small part in this change. In this post we look at Scotland’s nineteenth century commercial connections, and especially its relationship with Australia’s burgeoning economy.
The growth of world trade
By 1915, world trade was ten times larger than in 1850. New World producers sold their meat, timber, rubber, wool, tea, and other commodities to eager European markets, and in turn purchased more imports and took more loans. For Australia in the late nineteenth century, wool, beef, mutton, butter, and cheese were significant exports to Britain. By 1900, Australian exports to Britain were eleven times more valuable than in 1890, and by 1913, Australasia provided Britain with almost a third of its sheep meat. Australian pastoral and agricultural business was, therefore, an important market for British investors. Further, between 1821 and 1915, approximately 44 million emigrants left Europe for the United States, Canada, Australia, and New Zealand, and the movement of people around the world sustained global investment in these decades.
Scottish business in the colonies
For Scots at home and abroad, personal and business networking between investors and borrowers was crucial to their financial success. Take for instance Andrew McIlwraith from Ayrshire who, between 1875 and 1913, became an important promoter of Australian pastoral, mining, and shipping enterprises by utilising his connections in Scotland and linking them with borrowers and investment opportunities in Australia. In Scotland, a prevailing strand of thought was that the Empire provided plentiful opportunities for Scots from many backgrounds; Scots at home looked upon the achievements of émigré Scots with great pride, and they saw emigration as a testament to the innovative and dynamic qualities of the Scottish people. The commercial middle class of Scotland considered the Empire as a place of great opportunity where they could exercise their entrepreneurial dynamism and enterprise. Central to the Scottish imperial mission was the presence of Scottish business in the colonies and in the commercial apparatus of the Empire.
Between 1870 and 1914, Scottish investment and funding overseas was highly substantial. Estimates of total capital exports in this period vary from £60 million in 1870 to between £390 million and £500 million in 1914. Around 44 per cent of increases in domestic Scottish capital between 1885 and 1910 was derived from overseas investment. Most capital was directed at the USA, Canada, Australia, New Zealand, India, and Ceylon, and the Scottish contribution to investments in the Empire were up to 60 per cent higher than the British average. Scottish foreign investment was therefore a key component of all British imperial commercial activity in the late nineteenth and early twentieth centuries.
Scots and regional trading
Australia offered Scots a regional platform for extending their commercial interests into other parts of the southern hemisphere and the Empire. Scottish merchants Robert Campbell and Alexander Berry played a large role in the consolidation of Australian trading connections with India. Through their involvement with the East India Company, Berry and Campbell helped to make India a bridge between Scotland and the Australian colonies in the first two decades of the nineteenth century. Campbell in particular convinced many that the exportation of Australia’s raw materials could assist in developing a mutually beneficial trading relationship between the colonies and the rest of the British Empire. His greatest victory was having a hand in the opening of free trade to and from Australia in 1815. Campbell and Berry were among other Scottish traders from India, including William Douglas Campbell, Charles Hook, and William Walker, who were largely responsible for breaking the monopoly of military officers on foreign trade from Australia in the late eighteenth and early nineteenth centuries.
Scotland and Australia
Scots had been involved in legal and illegal trading from the colonies from at least the 1790s, and early capital investments in Australia included the foundation of the Australian Company of Edinburgh and Leith in the 1820s, while two Aberdeen-based mortgage companies were established in the 1830s and 1840s. Scots traders were heavily involved in one of Australia’s first major export industries, whaling, in the 1820s and 1830s, while Scottish trading and mercantile networks were operating throughout New South Wales and Van Diemen’s Land well into the second half of the century.
Serious commercial activity began later in the century, coinciding with the overall growth of Scottish foreign investment. In some cases, capital from Scotland was a critical element of economic development abroad and, by the 1880s, at least one third of Australian pastoral, mortgage, and investment securities were taken up in Scotland. Before the 1893 Australian financial crisis, Scotland was the dominant source of British loans to Australia. Australia reciprocally invested in Scotland, too.
Nevertheless, Australasian imports were only ever a small percentage of the total entering Scotland. In 1911, the tonnage of shipping entering Glasgow from Australia and New Zealand accounted for just 2.5 per cent of the total; European imports accounted for 44 per cent and those from the USA 19 per cent, followed by Canada and India, which both contributed 13.5 of the total tonnage. Scotland’s commercial connections were more transatlantic than they were Antipodean.
In some Australian industries, however, the Scottish connections were essential. For example, Scotland provided Australian shipping companies with over two-thirds of their large freight and passenger ships, thus dominating the market for coastal shipping vessels until the end of the First World War. Furthermore, the contribution of both Scottish capital and labour in Australian pastoral endeavours was substantial.
In Australia, Scottish migrants – who were statistically overrepresented in business – played a disproportionate role in colonial commerce and finance. Their influence extended into mining, agriculture, and manufacturing, along with banking, management, and investing. The commercial dominance and impact of Scots, however, was far greater and far more influential in British North America. Additionally, across the Empire, Scots were rarely the majority in commercial leadership circles, and nor were they the only ethnic group to display entrepreneurial flair. The successful and prominent are easier to recover from the historical record, while the failures and the “proletariat” are far less visible. Although there is a risk of overstating their contribution, Scottish commerce and business activities in Australia were nonetheless notable.
In a broader sense, the late nineteenth and early twentieth centuries brought an increased penetration of Scottish commerce into North America and Australasia, which was a development that ran parallel to the escalating thirst of the colonies and the United States for British and European finances. Australia’s commercial links with Scotland were somewhat specialised, and perhaps weaker than connections with other parts of the Empire such as North America and India. Nevertheless, Scottish migrants and money were essential in the development of the Australian colonies, especially its shipping and pastoral industries. Overall, Scottish business was important in the grander scheme of British commerce across the world, both for the development of the New World and the financial health of Scotland.
This post originally appeared in The Scottish Banner.