Trade, enterprise, and Scotland’s commercial empire

In 1855, after travelling through Victoria for two years, English author William Howitt reflected in his diaries on the energy expended by Scots on commercial endeavours in the colonies. ‘We give the Scotch much unbounded credit for enterprise and the quality which their own word ‘canny’ so well expresses,’ wrote Howitt, ‘that we are not surprised to find a host of Scotchmen on whatever shore we may step, where money is to be made. Neither the snows of Canada nor the heats of India present any obstacles to them.’ At home, the commercial class of Scotland considered the British Empire a place of great potential for entrepreneurial dynamism and enterprise. Indeed, central to Scotland’s imperial mission was the presence of Scottish business within the apparatus of Empire.

The imperial hunger for new lands, resources, and markets would extend, eventually, to the Australian colonies, and with the migration of thousands of individuals over the nineteenth century Scotland made a significant contribution to the European colonisation of the continent. In conjunction with the export of its people, Scotland’s commercial connections also spread into the Antipodean colonies with a substantial investment of capital and labour in the nascent Australian pastoral industry. Scottish commerce in colonial Australia operated at various scales – from large investment companies and the extensive mercantile class, to intricate social and familial networks – and formed the vital commercial arm of Scotland’s imperial endeavours.

Scots and Scottish money were in the vanguard of Australia’s nineteenth-century pastoral industry, which dramatically remade the landscape – culturally and physically – and had far-reaching consequences for both the new arrivals and Australia’s first peoples. As Mairi Stewart and Fiona Watson have written, during the nineteenth century in Scotland ‘there developed an overwhelming imperative to dominate nature … Increasingly, nature became a focus for ‘improvement’, and in time, across the land it is likely that change was realised to a far greater extent than had ever been known before in terms of human impact.’ The drive for agricultural improvement proceeded apace in Australia.

Australia offered Scots a regional platform for extending their commercial interests in the southern hemisphere and further throughout the Empire. Scots were already disproportionately represented in the lucrative commercial empire of the East India Company (EIC). Indeed, novelist Walter Scott wrote that ‘India is the corn chest for Scotland where we poor gentry must send our younger sons as we send our black cattle to the south.’

In the wealthy province of Bengal, Scots accounted for nearly half of both ‘Writers’ and officer cadets, and over half of assistant surgeon recruits. In Madras, from 1720 to 1757, all of the Principal Medical Officers were Scottish. Between 1776 and 1785, of the free merchants awarded permission by the EIC to trade within the East (but not with Britain), around 60 per cent were Scots. By the first decade of the nineteenth century, Scots owned over a third of private merchant houses in Calcutta. Apart from wealthy merchants, Scots were also overrepresented in the military services in India. Of the fourteen royal regiments garrisoned in India half were raised in Scotland. There was, therefore, a considerable Scottish presence in India throughout the eighteenth and into the nineteenth century.

The Scottish-India relationship was extended to Australia in the late eighteenth and early nineteenth centuries, and much of this expansion was in the hands of merchants. Robert Campbell was a Scottish-born merchant who had a great influence in opening free trade to and from Australia in the earliest decades of the nineteenth century. At the age of 27, Campbell travelled from Greenock to India in 1798 to join his older brother, John, who was a partner in the Calcutta merchant house of Campbell Clarke & Co., which had been established in 1790. The firm was one of the earliest to engage in commerce with Australia. In 1796, they sent their first cargo to New South Wales in the Sydney Cove, which became shipwrecked. Soon after his arrival in 1798, Campbell was admitted to a partnership in the firm, and a few months later he left in the Hunter for New South Wales on another attempt to develop commercial ties with the colonies.

With the governor’s permission he took up residence on land bought in 1798 at Dawes Point, where he began to build warehouses and a private wharf. Between August 1798 and February 1800, he established a regular trade between India and New South Wales, and by 1804 Campbell & Co. (the Clarks had left the partnership in 1799), had £50,000 worth of goods in its Sydney warehouses. Between 1800 and 1804, the colonial government contracted Campbell to supply the Sydney and Derwent regions with supplies of livestock from India, and in these four years alone the trade was worth £16,000. In 1805, he initiated a colonial sealing industry, travelling to England with a cargo of oil and fur skins for the British market, and thus violating the monopoly rights of the EIC to control trade from Australia.

Campbell’s merchant enterprise was grounded in a distinctly Scottish trading network that extended from Calcutta to Sydney to Glasgow. The Campbell & Co. merchant house in Calcutta always recruited its agents and workers from familial relations at home in Scotland. His biographer observes that Campbell and his family exhibited ‘a distinct preference for their own race … Their partners, if not actually members of the family, were Scots, and so were the captains of the ships they employed or hired, their up country and overseas agents were of the same race, and inevitably, so were their creditors.’ Campbell played a leading role in opening up the Australian colonies to free trade and undermining the monopolies of both military officers and the East India Company. He also exemplified the ways in which Scots infiltrated imperial networks in a distinctly self-conscious fashion. He was among other Scottish traders from India, including William Douglas Campbell, Charles Hook, and William Walker, who were largely responsible for breaking the monopolies on foreign trade from Australia in the late eighteenth and early nineteenth centuries. Scots then, were arguably instrumental in promoting and enacting colonial free trade in Australia and the British Empire.

While Scottish merchants built their enterprises, investors in Scotland began to take an interest in the new colonies. Both formal and informal networks began to form between Australia and Scotland. In 1822, a group of merchants from Edinburgh and Leith came together to form the first public company in Britain to operate in the Australian colonies. Throughout the 1820s, the Australian Company of Edinburgh and Leith exported a variety of products, including oatmeal, butter, salt, barrelled herrings, whisky, ale, wine, livestock, timber, cotton, and woollen textiles. A lack of return cargoes due to Australia’s as-yet undeveloped wool industry, in combination with competition from Greenock, London, and Liverpool exporters and an overabundance of British imports in the colonies, led to the company’s termination in 1831.

The Scottish Australian Investment Company, formed in Aberdeen in 1840 in response to news of a booming sheep and wool industry in the colonies, was more successful. Upon formation, the company defined its purpose as the ‘acquiring of land, either by purchase or otherwise, and of other property, real and personal, for re-sale, or letting out for agricultural or grazing operations … and also, the granting of loans or advances on the mortgage of real property.’ In the first half of the 1840s, the company made substantial investments in the Australian pastoral industry, purchasing and advancing loans for both land and livestock. From the later 1840s, it also invested heavily in mining and shipping. In the second half of the nineteenth century, the Scottish Australian Investment Company was one of the chief businesses in the colonies.

Along with the Scottish Australian Investment Company of Aberdeen and the Australian Company of Edinburgh and Leith, other important Scottish pastoral companies in Australia from the mid-nineteenth century were George Russell’s Clyde Company in Glasgow, and the partnership of Niel Black, William Steuart, and Thomas Gladstone in Niel Black & Company. By the nineteenth century, Scottish business was firmly embedded within its imperial diaspora. For Scots at home and abroad, business networking between investors and borrowers was crucial to success.

Commercial activity between Scotland and Australia increased towards the end of the nineteenth century, coinciding with the overall growth of Scottish foreign investment. By the end of the century, Scotland’s involvement in colonial economic development was widely recognised. In 1884, Blackwood’s Magazine observed, ‘three fourths of the foreign and colonial investment companies are of Scottish origins. If not actually located in Scotland, they have been hatched by Scotchmen, and work on Scottish models.’

Between 1870 and 1914, Scottish investment and funding overseas was substantial, and positioned Scots at the forefront of Britain’s economic ‘informal empire’. 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 the increase in domestic Scottish capital between 1885 and 1910 was derived from overseas investment. Most capital was directed at the United States, 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.

The circulation of Scottish capital abroad was linked with migration and the growth of the ‘New World’ after 1870; by 1915, producers were selling 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. Australian exports to Britain were worth £25.2 million in 1900, 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.

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 private British loans to Australia. Additionally, individual Scottish business people and their associated networks, along with larger Scottish investment companies, were integral to the development of the Australian pastoral industry. Scottish foreign investment was a therefore key component of all British imperial commercial activity in the late nineteenth and early twentieth centuries, undermining the view that ‘informal empire’ was a London-centered affair.


This is an excerpt from The Scots in Australia 1788-1938, published by Boydell Press in 2017.

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