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Corporate survival during the 1890s land bust: Thewestern Australian connectionJenny Gregory aa Taught Australian history , University of Western Australia ,Published online: 18 May 2009.

To cite this article: Jenny Gregory (1988) Corporate survival during the 1890s land bust: The western Australian connection,Journal of Australian Studies, 12:22, 40-56, DOI: 10.1080/14443058809386970

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Corporate Survival during the 1890s LandBust: the Western Australian Connection

Jenny Gregory

The land and building boom of the 1880s and its subsequent bust in the 1890s havebeen amply documented by a number of writers.1 Most have concentrated on theEastern colonies, for the general consensus of opinion has been that economic cyclesin Western Australia bore little relation to those in the East.2 However the fortunesof at least one land and investment company founded in New South Wales duringthe land boom, suggest that the relationship between East and West was moreimportant than has hitherto been realized.

This" company was the Intercolonial Investment, Land and Building Co Ltd,first registered under the New South Wales Companies' Act in November 1885. Itsurvived the depression of the 1890s and prospered as an independent public com-pany until 1960, when it was taken over by Mercantile Mutual Insurance Co Ltd. Asthe Mercantile Investment Co Ltd it is now a subsidiary of Mercantile MutualHoldings Ltd.3

The name Intercolonial Investment Land and Building Co Ltd has emerged ina number of studies in Western Australian urban history over the past twenty years.4

It has gradually become clear that between 1886 and 1900, the company purchasedhundreds of acres of land which almost encircled the city of Perth, as well assubstantial holdings in the central business district of Perth and large tracts in andaround Albany.5

Most Western Australian writers have been unaware of the extent and timingof the Intercolonial's holdings in WA and have speculated that its directors recog-nized the warning signs of depression in the Eastern colonies and looked elsewherefor favourable investment opportunities. In this they followed Butlin, who hadearlier argued that the Intercolonial was an example of a land company that survivedthe depression in the East because of its holdings outside a major urban centre, andthat good management enabled the company's directors to anticipate the WA goldboom of the nineties.6 At the WA end, Crowley had noted the activities of theIntercolonial and had concluded that WA's mild land and building boom of the mid1880s was part of the general pattern of land speculation in the Eastern colonies and

1. See for example N.G. Butlin, Investment in Australian Economic Development 1861-1900, Cambridge 1964; E.A. Boehm, Prosperityand Depression in Australia 1887-1897, Oxford 1971; and M.M. Cannon, The Land Boomers, Melbourne 1966.

2. Boehm, op. cit., p. 61.3. Jobson's Year Book, 1960, p. 231 and 1982, p. 403.4. F.K. Crowley, Western Australian Suburb: The History of South Penh Western Australia, Perth 1962. p. 45; C.T. Stannage, The People

of Perth, Perth 1979, p. 288; J. McKenzie, The Birth of Subiaco; A study of the economic, demographic, structural andbehavioural development of the suburb', MA thesis, U.W.A., 1981, p. 11; J-A. Gregory, 'Nedlands; A Study in ResidentialSegregation and Community', BA Hons dissertation, U.W.A., 1982, p. 26; and A.E. Williams, Neilands: From Campsite to City,Nedlands 1984, p. 138.

5. Records of the Intercolonial Investment Land and Building Company Limited (hereafter Intercolonial Co. Records). Deposit23, ANU Archives of Business and Labour, Canberra.

6. Butlin, op. cit., p. 430.

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was 'mainly induced by investors from Eastern Australia'.7

Parts 1 and 2 of this article address these historiographie issues in attemptingto establish the motives of New South Wales investors who chose to enter the WAland market in the mid 1880s, and to assess whether they induced the WA landboom that occurred during these years. Parts 3 and 4 of the paper move from thegeneral to the particular in focusing on the Intercolonial Co and discussing itsestablishment and survival as an example of corporate strategies during the landboom and bust. Part 5 focuses on the career of Thomas Täte, a founding director ofthe Intercolonial Co. As such details of his career are woven into the preceding partsof the paper. Tate's role as a leading figure in the Intercolonial^ activities and later asan independent land agent in WA, is of particular interest as the effects of theemergence of corporate society during the late nineteenth and early twentieth cen-turies are reflected in his career.

1. Western Australia as a Field for InvestmentIn late 1885 large tracts of WA land passed into the hands of Sydney investors.Several of these men visited Perth, assessed its investment potential and made acalculated decision to speculate on a continuation of a minor upsurge in the Perthland market. They then convinced a number of their associates in the East to dolikewise. What was so attractive about real estate situated over 3000 miles from theircompany headquarters?

The orthodox version of Western Australian history has suggested that it wasonly with the discovery of large deposits of gold in the 1890s that WA began toattract investment capital and progress. Indeed Appleyard has defined the twentyone year period between the cessation of transportation in 1868 and the granting ofresponsible government in 1890 as one of slow economic growth.8 In consequencethe 1890s are seen by most historians as a watershed. However, whilst periodizationmay be a convenient historical tool, it tends to obscure the minor surges in economichistory, which we, with hindsight, either perceive as false starts or ignore. In con-trast, contemporaries appear to have greeted such surges with the same optimismwith which they welcomed those which later proved to be more enduring. Onesuch upsurge occurred in the mid 1880s in WA, and although a minor downturnoccurred in 1888, the character of this mini boom indicates that it laid the foun-dations for the rapid acceleration and maintenance of economic growth in the1890s.

Using population growth as a major indice of economic growth, it is apparentthat from 1884 there was a gradual increase in net migration to WA which, togetherwith a natural increase, culminated in a boost of 13 per cent to the population during1886. Western Australia did not achieve this level of population growth again until1893.9 This mid 1880s hump in the population curve was in part the result of theimmigration of hundreds of workers associated with the construction of the GreatSouthern Railway.

The building of this railway was promoted by Anthony Hordern, member ofthe Sydney merchant dynasty, who seems to have been one of the earliest of the

7. Crowley, op. cit., pp. 42-43.8. R.T. Appleyard, "Western Australia: Economic and Demographic Growth 1850-1914. in C.T. Stannage (ed), A New History of

Western Australia, Nedlands 1981. p. 216.9. Ibid., calculated from Appendix 6:1, p. 234.

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generation of Sydney investors associated with the 1880s boom in the easterncolonies to show an interest in WA land. The Great Southern Railway, the longestbuilt in Australia at that time, was commenced in November 1886.10 Althoughultimately the scheme was a failure in its land grant and immigration aspects, it wasimportant for the boost it gave to WA's population, for the provision of a rail linkbetween Albany (at that time the colony's principal port) and Perth, and for theattention it drew to Western Australia both in the eastern colonies and over-seas.

Public capital formation in Western Australia had begun to increase from1881. This was largely the result of a more liberal policy towards the authorisationof loan funds.by the British government. In consequence public expenditure in thecolony began to rise, particularly in the area of railway construction." Loan fundshad earlier been used to finance a telegraph link with the Eastern colonies, thusproviding a comparatively rapid means of communication with the financialsystems of the East and the London money market.

The 1880s also witnessed a number of proposals for improving harbour facili-ties at Fremantle. The port had never provided safe winter anchorage and inconsequence all mail and passenger services from overseas and interstate called atAlbany rather than Fremantle. However in 1885, after the commissioning of areport by an eminent British engineer, expectations were high that improvementswould soon be made, which would significantly affect the accessibility and progressof both Perth and Fremantle.

Several other factors enhanced the economic potential of the colony at thebusiness level. Progressive liberalisation of the land laws included the adoption ofthe South Australian Torrens system in 1875, which simplified the cumbersomeprocess previously involved in land dealings. By the 1880s banking facilities hadalso been improved. Three eastern banks had opened branches in Perth and com-petition between these and the West Australian Bank had become brisk. The entryof these banks into the local market facilitated investment by eastern financiers andinvestors. It is noteworthy that when the Intercolonial was founded, its bankerswere the Bank of New South Wales.

The possibility of gold discoveries in Western Australia had been discussed formany years, but by the early 1880s the likelihood of this was being given greatercredence. A report by the government geologist, E.T. Hardman, who accompaniedthe Kimberley surveying expeditions of 1883 and 1884, had indicated promisingcountry.12 The Victorian William Carr-Boyd, who had mounted an expedition tothe Kimberleys in 1888, was so convinced of the existence of gold in that region,that when he mounted a second expedition in January 1885, he announced hisintentions in a notice in the Sydney Morning Herald headed 'Gold in the KimberleyDistrict'.13

Bolton has asserted that early hints of the presence of gold in WA wereignored until the colony had reached a certain stage of economic and politicalmaturity'.1'1 According to Bolton the exploration and settlement of the Kimberley

10. G.C. Bolton, Alexander Forrest: His Life and Times, Melbourne 1958. pp. 52-68.11. Appleyard, op. cit., Table 6:3, p. 217.12 J.S. Battye, Western Australia: A History from its Discovery to the Inauguration of the Commonwealth, Oxford 1924. facsimile edition.

Nedlands 1978. p. 364.13. S.M.H., 21 January 1885.14. Bolton. op. cit., p. 44.

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region in the early 1880s and the successful establishment of the pastoral industry, aswell as a measure of self government and a certain level of population, were neces-sary preconditions for WA's rapid development in the 1890s. These preconditionshad been met by 1885.

Nevertheless it must be remembered that Perth in 1885 bore greater resem-blance to a market town than an urban centre. Even Brisbane, the closest capital insize to Perth, had three times the population. Adelaide, with about 95,000 inhabi-tants, was fifteen times larger.15 The look of Perth in 1888 was captured by themanager of the Bank of New South Wales when he wrote:

Perth is a pretty place with a large extent of salt water frontage but laid outon a scale sufficient for a couple of hundred thousand whereas its peopleamount to about six — thus it has a very scattered straggling appearance andthere is only one street with continuous building and this but for a shortdistance.16

Within two years of these comments, investors were drawing parallelsbetween Perth and Sydney of the 1840s. Despite Perth's size and appearance, thefeeling had developed that as the only mainland capital still languishing, Perth mustsoon develop. A reading of even the conservative West Australian during the secondhalf of 1885 confirms this view. There was a mounting sense of confidence ineditorials, articles and letters. The various railway proposals generated a great deal ofdiscussion and tremendous importance was placed on Hardman's report on theKimberleys, which became public in early September 1885.

However, even before this date, there is evidence of land speculation in Perth,which seems to have commenced in July 1885. This is directly related to the returnof Governor Broome from England on the 20th June. The announcement that hehad raised a loan of .£500,000 for the public works programme, created enormouspublic excitement.17 Broome was treated like a conquering hero and while the toastsand speeches continued to be reported to the avid readers of the West Australian, thelandowners and investors of the Colony took full advantage of the mood of optim-ism. Within ten days of Broome's return, local landowners were subdividing andauctioning estates to the north and south of Perth.18

The release of Hardman's report added fuel in an already flammable atmo-sphere. The land market took off with half a dozen estates springing into existencein as many days. When a telegram announcing 'the alleged discovery of gold inpayable quantities in the Kimberley district', was read to the Legislative Council byno less a person than the Colonial Secretary, the merry-go-round of speculation wasgiven an added fillip.19

Thus, whilst by 1885 Perth had hardly reached urban status, it can be arguedthat it was already entering the next stage of its economic development. Many of thepre-conditions for an economic take-off had been met and to some, WA's invest-ment potential seemed assured.

These events occurred at the very time that the New South Wales economy

15. Scannage, op. cit.. p. 85.16. R.F. Holder. Bank of New South Wales: A History, vol 1, Sydney 1970. p. 411.17. West Australian, 20 June 1885.18. Ibid., 30 June, 15 July. 11 August, 31 August 1885.19. Ibid., 16 September 1885.

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was showing signs of a downturn. Although both Butlin and Boehm have gener-alised that the downturn in land values in the Eastern colonies took place in theyears 1888-89,20 this generalisation fails to take into account an earlier lull in theNew South Wales economy. Butlin himself concluded that by 1885 the New SouthWales economy was showing signs of strain.21 During at least the previous twelvemonths, urban investment had been contracting, railway investment had declinedand unemployment had increased. The downturn was highlighted in June 1886when the banks increased interest rates and tightened credit in an attempt to checkspeculative activity on the New South Wales land market.22 Did New South Walesbusinessmen perceive the early warning signs?

Investors may have reflected on the example of the South Australian econ-omy. In a prelude to events in Sydney and Melbourne later in the decade, a land andbuilding boom developed in Adelaide between 1875 and 1882. However after a fewyears of massive speculation on the land market, drought, declining agriculturalyields, and a tightening of finance, brought the boom to a halt.23 In early 1886 whenthe Commercial Bank of South Australia failed, the colony had plunged intodepression. The intensifying collapse was fully reported in the Sydney newspapersfrom at least 1884.

It is difficult to place ourselves in the position of Sydney investors in the mid1880s, and to put aside hindsight and a more sophisticated understanding of thenature of economic cycles, in order to see conditions from their point on the his-torical continuum. These men may have been aware of a temporary hiccough in theeconomy, but these were the heady days of Sydney's land boom, when even munici-pal assessments of the capital value of land had risen by an average of 12 per cent in1884.24 There is nothing to indicate that they were at all fazed by the economicindicators which historians of later generations have pointed to. The banks had notyet attempted to put on the brakes and South Australia's economy had not yetcollapsed. It is doubtful whether land dealers would have been able to draw backfrom the activities of the market place and take stock. At the very least their de-cisions must have been coloured by the optimism of prosperous times. With thisoptimism they may well have perceived conditions in Western Australia throughrose coloured glasses.

2. New South Wales Investors in Western AustraliaIt was the familiar atmosphere of land speculation, that twenty nine year oldThomas Täte of Sydney entered, when he disembarked from the Rob Roy, the smallsteamship that carried passengers between Albany and Fremantle, on Tuesday, 3September 1885.25 His companions amongst the seven other saloon passengers wereJohn Lawler, with whom he would later found the Sydney land agency of Täte andLawler, and David Davies, a Kogarah land agent. At that time Thomas Täte w?sworking in his father's firm, Täte Bros, auctioneers, commission agents and produce

20. Butlin. op. ci t . , pp. 424-427, and Boehm. op. cit., p. 254.21. Butlin, op. cit., p. 411.22. Ibid.23. M. Williams, The Making of Adelaide", in J.W. McCarty and C.B. Schedvin (eds). Australian Capital Cities, Sydney 1978.

pp. 127-128.24. T.A. Coghlan, Labour and Industry in Australia, vol III, p. 1666.25. Ibid., 4 September 1885.

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merchants of Sussex St Sydney. As auctioneers they had already been involved in thesubdivision and sale of a number of Sydney estates.26

To the three young men, newly arrived in Perth, land values must haveappeared ridiculously low in comparison with inflated Sydney prices. This wasespecially evident in inner city land values. Kelly's research into the inner citysuburb of Paddington, suggests that although land speculation had virtually ceasedin that suburb by 1880 as it entered its building phase, in 1885 land values werearound ,£8 a foot,27 or approximately £260 for a one-sixth of an acre block. Incontrast quarter acre blocks in the City View Estate, North Perth, within two milesof the city, were for sale for between £ 15 and £20 each.28 Even in newly developingareas of Sydney such as the Kangaroo Heights Estate in Manly, one-sixth acre blockswere priced at £60. These were advertised as 'the best chance for a working man toget a bit of land in Manly'.29

26. Sands Sydney and Suburban Directory, Sydney 1889, and S.M.H. real estate columns.27. M. Kelly, 'Eight Acres: Estate Subdivision and the Building Process. Paddington 1875-90', in McCarry and Schedvin, op. cit..

pp. 52-53.28. West Australian, 11 August 1885.29. S.M.H., 31 October 1885.

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Täte, Lawler and Davies were not the only Sydney investors to visit Perth inSeptember 1885. William McMillan (later Sir William), the resident partner inAustralia of the English merchants and importers, W & A McArthur Ltd., hadtravelled with them on the RMS Pekin as far as Albany, arriving on 31 August andtravelling up to Perth later in September.30 In 1886, McMillan was to become Presi-dent of the Sydney Chamber of Commerce and later an MLA and ColonialTreasurer in the Parkes Government. Between 1902 and 1908 he moved into Federalpolitics, becoming Deputy Leader of the Free Trade Party.31 In 1885 he was already aman of some considerable influence. Whilst in Perth, he purchased 21 Vz acres in thecity of Perth and the 27 acre Belvidere Estate in East Perth, through the agentsForrest and Angove, for an outlay of the not insubstantial sum of ̂ 4250.32 McMillanis thought to be the author of an understandably glowing account of Perth, whichwas used in a real estate advertisement in the Sydney Morning Herald some monthslater:

I regret exceedingly that Sydney people have not long ago turned their eyesto this Colony. There is no grander field for speculation or legitimatebusiness of a mercantile nature than here. If the enterprising Sydney mer-chants were to direct their attention to this Colony, and open houses here, Ifeel confident they would ensure success...

The place is now in the same condition as Sydney was thirty or forty yearsago, and now is the time to select blocks of land in the city . . . Immensefortunes are being made here in the purchase of land, and I do not believethere is a better chance for speculation at the present time than the ju-dicious purchase of town and suburban blocks.33

During late 1885 and 1886 a number of Perth estates were advertised in theSydney newspapers. These included the Riverside Estate,34 later marketed as the EastPerth Freehold Land Company,35 the South Perth Land Company,36 later floated asthe Western Australian Land Company;37 and the Summerfield Estate Land Com-pany.38 All were purchased by groups of New South Wales parliamentarians andmerchants, prominent among which was William McMillan.

In November 1885 the editor of the West Australian devoted a lengthy editorialto 'the speculative mania [which] has invaded the peaceful banks of the River Swan'.He drew attention to the course of events in the eastern colonies, observing 'that thepopular passion in this direction is at last slackening off, and that many of ourEastern contemporaries are urgent in their words of warning and of caution.' Hedescribed the process of land speculation, applauded some of its consequences (par-ticularly the influx of capital into WA and the fact that subdivision made it easierfor individuals to own land), but suggested that 'the wants of our people are . . . forthe time being fully supplied.'39

30. West Australian, 1 September 1885.31. Johns Notable Australians, 1906.32. West Australian, 23 September 1885.33. S.M.H., 20 February 1886.34. Ibid., 31 October 1885 and 17 April 1886.35. Ibid., 4 December 1886.36. Ibid., 20 February 1886.37. M. Uren, The City of Melville, Melville, W A 1975. pp. 10-11, 17-20.38. S.M.H., 6 August 1886.39. West Australian, 27 November 1885.

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If the local market was in fact nearing saturation by November 1885, as theeditor of the West Australian concluded, this in part explains the increasing appear-ance of Perth land on the Sydney market from this time. At the Sydney end, inflatedprices had begun to put land out of the reach of many potential investors. Thus theavailability of cheaper land in Perth met an obvious consumer gap in Sydney.

This editorial again raises the question, was the Western Australian land boominduced by investors from the eastern colonies, as Crowley has concluded. It is clearthat there were a number of New South Wales investors active in Perth in 1885-86.At least eleven Perth estates were advertised in Sydney in those years. We do notknow what links existed between these men, apart from their parliamentary con-nections and their status, but it is doubtful that they were acting in isolation.However, it appears that the initial impetus for the boom was local. Considerableresearch is required to establish whether West Australian landowners or New SouthWales investors, who did most of the subdivision, made the greatest profits out ofthe boom. One is left with the strong suspicion that a number of investors from theEast were taken for the proverbial ride and sold land that potential for a profitablereturn lay in the long distant future. Despite the fact that without the input andcapital of New South Wales investors, the WA land boom would not have reachedsuch proportions nor been sustained, it was the WA landowners who initiated theboom and who profited most from at least the initial round of speculation.

3. The Foundation of the Intercolonial CompanyThomas Täte, John Lawler and David Davies arrived in Perth before the land boomreached its peak. They were thus able to buy well located land on a rising market.Land within a reasonable distance of the city was still available. In purchasingcomparatively small parcels of land dotted around the city centre near its maintraffic arteries to the north, west and south and usually on high ground, they wereable to spread their risks. They had ready access to capital and therefore the means tomake quick decisions to purchase land in good locations. Whilst their outlay peracre was greater than many other Sydney investors who purchased in more isolatedareas, the opportunities for a fairly quick resale were also greater. They also diversi-fied their investments by purchasing land in Albany, at that time still the premierport of Western Australia and terminus for Hordern's projected Great SouthernRailway. In total, during their visit to Western Australia, the three men invested£15,OOO.40

On their return to Sydney, negotiations commenced immediatelyfor the saleof Täte, Lawler and Davies' West Australian land to the Intercolonial InvestmentLand and Building Co Ltd, which was established for that specific purpose. Thespeed with which this was conducted, indicates that the project had been plannedearlier and only required the successful completion of the buying trip, for arrange-ments to be set in motion. The first meeting of the company's provisional directorswas held on 16 October 1885, and the company was registered, under the notori-ously loose New South Wales Companies Act, two weeks later.41

The Intercolonial was founded with an authorized capital of £500,000, madeup of £l shares, initially paid up to three shillings, although the initial prospectus

40. S.M.H., 12 August 1886.41. Ibid.

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made provision for monthly calls of one shilling if required.42 Within five monthsthe subscribed capital of the company had reached £61,000, however as by this timethe shares were only paid up to five shillings, the company's real monetary assetsamounted to only £15,250. In comparison with other New South Wales landcompanies founded in the 1880s, the Intercolonial was of moderate size.

The original directors of the Intercolonial who were willing to back thejudgement of Täte, Lawler and Davies, are thought to have been associates of Täte'sfather, G.W. Täte, who was appointed the company's first chairman. One of thesewas William McCourt, JP, MLA and later Speaker of the New South Wales Legis-lative Assembly. Originally a printer, his major business interest had been as founderand owner of a district newspaper, the Moss Vale Scrutineer with other businessventures mainly in land speculation.43 Thomas Täte was born at Jamberoo, 15 mileswest of Moss Vale, and his father divided his time between the family property inthe Moss Vale district and his town house 'Westella' at Glebe Point, and later'Edenville' in Randwick. According to family tradition the Tates were related to theBritish merchant and philanthropist, Sir Henry Täte, founder of the Täte Gallery inLondon.44

The other directors of the Intercolonial were Sydney businessmen, C.F.Wymer, Thomas Melliday and Archibald McClemens. John Lawler was the sixthdirector and Thomas Täte managing director. David Davies did not become adirector, although he became a major shareholder in the company.

The Intercolonial immediately began to advertise its Perth acquisitions, in-itially testing the market response with the City View Estate in North Perth. At firstPerth's natural charms, the Estate's views of the Swan BJver, the cheapness of theland (five shillings per foot) and the easy terms were emphasized.45 These bringinglittle response, a new tactic was tried, and subsequent advertisements cataloguedWestern Australia's progress and potential as 'A New Eldorado'.46 As the marketersof other Perth land presumably found, the anticipated hordes of buyers were notreadily forthcoming.

In February 1886, a serious disagreement over the need to raise more capitalarose between the directors. This was only settled by recourse to the New SouthWales Equity Court, and had the effect of halting trading for four months, at thevery time when land values in Western Australia were given a decided boost by theannouncement, reported in the Sydney Morning Herald in April, that favourablereports had been received from the Kimberleys and that a rush to the diggings wasexpected.47 Before trading was stopped, the company managed one further adver-tisement, which it headed, 'Gold, Gold Gold. Great Discovery of Gold in WesternAustralia.'48

Although the course of events is clear, there is no clear evidence as to themotives of the directors in attempting to raise more capital and thus embroilthemselves in a round of chicanery, which ultimately led to litigation and the

42 Ibid., 12 November 1885.43. Cyclopedia of New South Wales. Sydney 1907, p. 92. and S.M.H., obituary, 23 June 1913.44. Interview with Mrs I. Tate of North Penh (daughter-in-law of Thomas Tate), 13 November 1984; Sands Sydney and Suburban

Directory, Sydney 1889; S.M.H., Prospectus. Intercolonial Co., 12 November 1885.45. S.M.H.. 12 November 1885.46. Ibid., 12 December 1885.47. Ibid., 8 April 1886.48. Ibid., 10 April 1886.

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appointment of a new board of directors. The background to ihis lay in the termsunder which the Intercolonial had purchased the West Australian lands of Täte.Lawler and Davies. The purchase price was £15,300, which the company met bypaying £5800 in cash and the remainder in 38,000 £ l shares, to be considered paidup to five shillings. At the time the directors had resolved that the first issue ofshares should not be called up beyond five shillings per share. However in February1886, at a general meeting of shareholders, the directors rescinded that motion, inorder to raise more capital. A further call of even one shilling per share, would havehad the effect of making Täte, Lawler and Davies liable for a payment of £1900 tothe company, and thus would have indirectly reduced the value of the payment thatthey had received for their West Australian land.

The three men were appalled and with natural justice on their side, called anextraordinary meeting of shareholders for the 31 March, in order, as the majorshareholders, to alter the articles of the company and to remove G.W. Täte,Melliday, McClemens and Frank Smith (who had earlier replaced Wymer) fromthe Board.

The heat of debate and the acrimony which attended this meeting can bereadily imagined. In order to give themselves more time for manoeuvre and to avoidbeing ousted, the directors gave notice that the meeting was to be adjourned for threeweeks, at which time a new election of directors would be held. Announcing thatthey would be candidates, the directors then closed the meeting at 11 pm. Then thechicanery began. During the interval between the two meetings, the directors madea call on shares, which was to be payable on the same date that the adjourned meetingwould be held. They knew full well that Täte, Lawler and Davies would be unableto meet this call, and would thus forfeit their right to vote, a move designed toensure the sitting directors' re-election. It was during this interval between meet-ings, that the Kimberley Gold Rush began, increasing the stakes for all con-cerned.

The adjourned meeting was held on 22 April. The election of directors washeld, and new directors appointed. However, at this point, the original directorsattempted to nullify the results, declaring that Täte, Lawler and Davies had no rightto vote, as they had not paid the call. In the uproar that followed these menannounced that they would continue as directors until their original term expired in1887. The upshot of this imbroglio, was that Thomas Täte, Lawler and Davies tookaction against the directors in the New South Wales Equity Court. The case wasupheld and the original directors, excluding McCourt, were ordered to pay costs.49

The new board of directors was now ratified with William McCourt as Chairmanand John Lawler, Thomas Täte, George Dyson (a city land agent) and RichardBrandon (of the city auctioneers and land agents, Brandon & Company) as co-directors.50

One wonders at the effect of these events on the relationship between fatherand son, George and Thomas Täte. Surely there must have been a residue of bit-terness left after the affair. Yet family ties proved surprisingly enduring, and within

49. S.M.H., Equity Court Case, 12 August and 14 August 1888 and T o the Shareholders of the Intercolonial Investment Land andBuilding Co. Ltd. Lawler and Others versus the Intercolonial Investment Land and Building Co. Ltd. . . .', pamphlet, 11 August1886, Intercolonial Co. Records, op. cit., deposit 23, series 1/2.

50. First Half Yearly Report, 1887, ibid., deposit 23, series 1/4; and Sands Sydney and Suburban Directory, op. cit.

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three years Thomas was writing affectionate letters to his father from overseas. Hisnine month Grand Tour through America, Great Britain and Europe, is believed tohave been taken on the advice of his physician' following the trauma of a divorcefrom his first wife. The letters, which his father had published, probably inMcCourt's newspaper, reveal a well educated, highly articulate man. with keenpowers of observation, a dry sense of humour and a gift with words.51

The tour reinforced Tate's belief in Australia's potential. This together withhis belief in the need for progress, which stemmed from the mores of his childhoodand youth in a well-to-do Congregationalist family and the entrepreneurial spirit ofthe era, were to surface time and time again in his subsequent career as a land agentand publicist.

Tate's entrepreneurial spirit was not dampened during the period in which thetrading of the Intercolonial was restricted. For at that time, he formed a secondcompany, the Joint Stock Building, Land and Investment Co Ltd. His co-directorswere William Coleman, a respected Sydney builder and contractor, George Dysonand James Green, a property salesman.52 The formation of this company seems tohave been a temporary expedient to enable trading to continue, and once Täte,Coleman and Dyson had been secured in their positions as directors of the Inter-colonial, the Joint Stock Company was bought out by the Intercolonial. At the sametime Täte was active in his own land agency, Täte & Company, which he operated atvarious addresses in Pitt St, Sydney, until at least 1896, when he transferred hisoperations to Perth on a permanent basis.

In the meantime the affairs of the Intercolonial began to prosper partly as aresult of Tate's continuation of trading through the Joint Stock Company. In April1887, after their first half year's trading under the new board, they were able todeclare a 15 per cent dividend, 'in spite of the universal cry, "dull times" and thecomparative cessation of land business during the past twelve months'.53 TheirAnnual Report submitted at the end of that year, discussed their operations, whichincluded the Manly Cove Estate, the Sutherland Township, the Centennial Estateand the Queen's Jubilee Township at Como on the George's River. All of these werein Sydney. Dividends were again declared at 15 per cent.54

However the company's success was largely the result of its Western Aus-tralian investments, as its directors pointed out, forecasting that with fresh dis-coveries of gold, the decision to implement responsible government and the spate ofrailway building, 'wonderful strides must be made . . . by Western Australia'.55

Over the following two years the company promoted its Western Australianland extensively. Apart from newspaper advertisements, other marketingtechniques were used with success. In 1888, following a trip to Western Australia bytwo of its directors, two pamphlets on the colony were issued to prospective buyers.These gave a brief history of the colony, as well as a synopsis of its system ofgovernment, revenue, trade and commerce, railways, and mineral, agricultural andforest resources. Extracts from various newspapers were featured to detail gold findsin all parts of the colony, but particularly in the Yilgarn and Pilbara regions.

51. Thomas Tate to G.W. Tare, 1889, copy of letter lent by Mrs. I. Tate.52. Prospectus, Joint Stock Building Land and Investment Company, 1886, Intercolonial Co. Records, op. cit.. 23/1/1.53. First Half Yearly Report, 1887, Intercolonial Co. Records, op. cit.54. Second Annual Report and Balance Sheet, December 1887, ibid., 28/1/5.55. Ibid.

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Comparisons were made with other colonies leading to the conclusion that 'It isnow Western Australia's turn to repeat history and commence her real march ofprogress.'56 These pamphlets were essentially designed to educate the public aboutWestern Australia and thus promote sales. In this the Company seems to have beensuccessful, for although the downturn in trading in Sydney reduced its growthslightly, it was still able to issue dividends of ten per cent per annum in the years

. 1888, 1889 and 1890.57

The quality of the Intercolonial Company's first board of management is insome doubt. One suspects that a number of the directors were simply front men,whose capital enabled the company to be floated and whose past record wouldensure a respectable image for the company. However if this is so, they were moreactive in the company's management than Täte and Lawler had bargained for, andalthough we do not know what motives lay behind the original directors' decisionto raise more capital, the method that they attempted to use was certainly less thanethical. There is also a sense that this may have been a generational conflict, withTäte and Lawler cast in the role of young Turks. Tate's commitment to the import-ance of investment in the WA land market is clear, and it was essentially he who wasresponsible for the healthy position in which the Company found itself as it enteredthe tumultuous years of the 1890s.

4. The Intercolonial FaltersIn the first half of 1891, the Intercolonial Company again issued a dividend of tenper cent, but this was to be the last for five years. In August of that year the first ofthe Sydney land companies to fail, suspended payment.58

In a direct response to the crash, the Intercolonial suddenly recognized thevalue of its WA investments as a hedge against the effects of plummeting land pricesin Sydney. Its main strategy in these circumstances was to open a branch office inPerth in November 1891, in the hope of increasing sales.59

However, despite this move, the company was forced to plough what profitsit had made back into the company that year. In 1892, notwithstanding theannouncement of a rise in WA land values, there was still no dividend. At the end of1893, the company felt it necessary to assure its 259 shareholders that despite thebank crash of that year, the Intercolonial stood firm. Shareholders and investorsneeded that reassurance. A bitter article in the Bulletin in the middle of 1893. hadobserved:

During the last two years nearly forty land banks have suspended paymentin New South Wales; their depositors, who numbered tens of thousands,were almost exclusively working men and women, and these depositorslost on average three fourths of their savings.60

During 1894 the Intercolonial managed to reduce its property holdings in NewSouth Wales, probably at a great loss, but was buoyed up by fair business inWA.61

56. 'Western Australia: A Brief Sketch", pamphlet. 1888. Ibid., 23/47/6.57. Annual Reports. 1888, 1889 and 1890, Ibid., 23/1.58. H.L. Harris, The Financial Crisis of 1893 in New South Wales', paper read before the Royal Australian Historical Society, 26

July 1927, p. 24.59. West Australian, 14 November 1891.60. Bulletin, 13 May 1898 quoted in Harris, op. cit., p. 25. The Intercolonial Co. also functioned as land bank, as did most other

companies of the same en. This aspect of the company's operations has not been investigated.61. Annual Report, 1894. Intercolonial Co. Records, op. cit., 23/1/4-94.

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Thomas Täte must have had mixed feelings about the day, back in September1884, when he and his associates stepped ashore at Fremantle. Without their WAinvestments, both Täte and the Intercolonial would have shared the fate of so manyof their contemporaries during the crash. But the Intercolonial was partiallycushioned by the size, as well as the spread of its investments. As an individualhowever, dependent on the commission from sales, as well as profits from the sale ofland which he owned, Täte was more vulnerable.

The extent of Tate's personal land investments are not known, but thanks tothe detailed work of McKenzie, we do know the extent of his investments in onePerth suburb. Between 1888 and 1890, in partnership with John Lawler and RichardBrandon, Täte purchased ten lots in Subiaco ranging in size from four to seven acres,and in total comprising 47 acres.

The Intercolonial did not commence buying land in Subiaco until 1890, whenit purchased 19 lots, over 85 acres. Over the next 20 years it purchased sporadicallyanother 11 lots, approximately 65 acres. Almost without exception, the Inter-colonial subdivided and sold these 150 acres. Täte. Lawler and Brandon subdividedonly 20 acres (four lots).62 Subdivision was where the big profits lay. We do not havedetails of the purchase price or the amount realized for any of these subdivisions,however McKenzie's research reveals that the Bowral Park Estate on lot 217(admittedly in the best part of Subiaco, near the fashionable suburb of West Perth)was purchased for ,f239 in 1886. Ten years later, after subdivision, it realized ,£7882at auction." It had passed through a number of hands in this ten year time span, butthis increase in value represented an average of 42 per cent per annum (com-pounded) on the initial investment. Admittedly the cost of subdivision, rates paidover the ten years, advertising and auction, would have reduced this considerably.Nevertheless, if the timing was right, land purchase and subdivision could be aparticularly lucrative form of investment. This was especially so for a companyrather than an individual. A company, such as the Intercolonial, had a greateramount of capital at its disposal and a limited liability. It was thus able to spread thenot inconsiderable risks amongst its shareholders. An individual did not haverecourse to such tactics, and therefore stood at greater personal risk.

By 1891 Täte was in a precarious position. His Sydney investments had col-lapsed, as had his livelihood as a land agent. He was dependent on returns from hisWA investments. At the end of 1891, he issued, through Täte & Company, a bookleton WA. There is a sense that this was a last ditch stand. It was a show of bravado tohave a 31 page illustrated booklet printed in an attempt to boost sales in WA.64

It is doubtful that in the catastrophic years of 1891-2, the exhortations con-tained in this booklet would have had much effect on the small Sydney investorsthat they were designed to attract. It was in Perth, now gripped by gold fever as aresult of gold discoveries in the Yilgarn, Pilbara and Murchison districts, that boththe investment potential and the potential investors lay.

This was clear to the Intercolonial Company when it opened its Perth office.It was as a result of trading in Perth that it was able to keep afloat. Although thecompany was still unable to issue a dividend in 1895, it was able to report the visit of

62. Ownership, dates of purchase and subdivision compiled from McKenzie, op. cit., Appendix 1.63. Ibid., p. 41, footnote 31.64. Printed Booklet, T. Tate & Co., c. August 1891, Intercolonial Co. Records, op. cit., 23/37/14.

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its manager to Perth, and to announce that despite the continued depression on theNew South Wales land market; 'the investments in Western Australia are increasingin value . . . and . . . arrangements [are] being made for a more energetic represen-tation of the Company's interests there'.65 The Company hoped this move wouldenable it to commence paying dividends again. In this year the book value of theCompany's assets had risen to. £71,042, while liabilities stood at £26,375. In mid1896 the Directors were able to declare a ten per cent interim dividend, the first forfive years, a direct result of profitable returns from WA.

5. Thomas Täte in PerthIt was during 1898 that Thomas Täte took over as Perth agent for the Intercolonial,to provide that 'more energetic representation of the Company's interests' that hadbeen referred to in the previous year.

During this first year in Perth, Täte established a branch of his own companyin Perth, gradually winding down his affairs in Sydney. In the first half of 1897 heassigned his seat on the board of the Intercolonial and his family joined him inPerth. For some years they lived in the exclusive Mount St, overlooking the city andthe Swan Baver.

The Tates had arrived in Perth at the height of the goldrush, and at forty yearsof age, Thomas Täte was in a prime position to take advantage of the economicboom. However, although Täte prospered, he amassed no vast fortune, as did anumber of the urban speculators who arrived in Perth in these years. Why was thisso?

Täte was a major shareholder in the Intercolonial, with his investments in thecompany returning ten per cent per annum between 1896 and 1898, but against thismust be set the previous five years during which he received no return on hisinvestment. His own company's prosperity had been badly hit by the collapse of theSydney land market and he is believed to have lost a considerable amount of moneyin the bank crash of 1893. However, he was a partner in at least four excellentlypositioned subdivisions in Perth, which he had bought comparatively cheaply inthe late 1880s. Now Perth was a boom town.

Part of the answer may lie in observations made by the mining engineer, A.F.Calvert, when he visited Perth in 1895-96:

Perth is a Paradise of Landlords... The "t'other-siders", as the new arrivalsare called, have mostly suffered too much from the depreciation of realestate in Melbourne, and to a lesser degree in all the other colonies, to makethem either able or willing to deal again in bricks and mortar.. . .

There is no delirious land boom fever — Victoria presents too near and toovivid a warning against reckless inflation. There is a brisk and steadybusiness at prudent prices.66

Täte was not a builder or a landlord. His only ventures into this field had been thebuilding of a few houses on subdivisions, as had been the practice of the Inter-colonial, to encourage land sales. In addition his experience of both the exhilaration

65. Annual Report. 1895, ibid., 23/1/4-94.66. A.F. Calvert. My Fourth Tour of Western Australia, London, second edit., 1901, pp. 10-12.

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and anxiety of the Sydney boom and bust may have made him a more cautiousman.

By mid 1898 the Perth land market had begun to stagnate. Whilst the Inter-colonial was still buying land in Perth, they had become more cautious in theirmarketing tactics. The slump was reflected in their dividend for the second half of1898, which was reduced to seven per cent, at which it was to remain for the nextseven years.67 Täte was obviously beginning to feel the pinch in his own company'strading, writing to the Intercolonial at this time for a salary increase. He must havebeen aware of the company's plans to build new offices in Sydney, and, no longer adirector and handicapped by both distance and reduced status, must have been frus-trated by his position on the periphery.

In January 1899, Täte resigned as agent for the Intercolonial Company inPerth, thus ending 14 years close involvement with the Company. Unfortunatelyonly one side of his correspondence relating to this matter remains, the letters of theSydney manager, WJ. Douglas, to Täte. Excerpts from Douglas' letters reveal thatTäte was beginning to panic:

Depression. Remarks noted . ; . We note that you advise us 'to get out' ifwe can, but you do not make any suggestions or give any advice as to howwe are to get out . . . Foretelling panic will not enable us to sell ourland . . .

No matter how dull a place may be there is always a certain amount of landbuying and we ought to try and get our share of it.68

It was at this time that Täte and his family moved from Mount St, Perth. Bynow he had six children, and he and his family moved into a reasonably substantialbrick villa in Subiaco on his subdivision, the Moore Park Estate. It was a step down,for although this was the better section of Subiaco, the sparsely settled suburb waspredominantly the residence of artisans. Only 12 per cent of its population at thattime were classed as having professional or commercial status.69

Tate's affairs had been inextricably linked with those of the Intercolonial forover ten years. During this time his personal investments were underpinned by hiscommitment to the company. However, once he had made the break from thecompany.(although presumably retaining his share holdings), his fortunes were tiedto those of Western Australia. Boom times did not return to the West until the1920s, by which time Thomas Täte was an old man living in semi-retirement withhis wife in what had originally been their holiday cottage in Nedlands. During the1920s his affairs brightened sufficiently for him to make two overseas trips in questof the Täte family fortune held in Chancery.70 However, the wealth that he hadexperienced as a child and youth in the boom years of the 1870s and 1880s in NewSouth Wales, was to elude him.

This article's findings support Crowley's general conclusion that the WesternAustralian land boom was a part of the general pattern of land speculation in the

67. Annual Reports 1898, 1899, 1900. 1901. 1902, 1904. 1905 and 1906, Intercolonial Co. Records op. cit., 23/1/4-94.68. Volume containing letters from the Manager to the Perth agent, folio 718, 6 March 1899, folio 748, 27 March 1899. and folio

754, 7 April 1899, Intercolonial Co. Records, op. cit., 23/4.69. McKenzie, op. cit., p. 107.70. Interview with Mrs. 1. Tate, op. cit.

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eastern colonies. However, it was not induced by investors from the East. The initialimpetus came from WA landowners whose confidence in the colony was buoyed upby a variety of factors which enhanced the colony's economic potential. Neverthe-less, the land boom in Western Australia would no: have reached such heights norbeen sustained without the input of New South Wales investors.

It is unlikely that the land boomers of Sydney recognised the warning signs ofdepression in the eastern colonies. Although there was a downturn in the NewSouth Wales economy in 1885, profits were still being made from land sales.However, the opportunities for large profits had decreased, as land prices in Sydneybecame increasingly inflated. Land moved beyond the reach of the lower middleclasses as a potential investment, and thus the market began to contract. With theIntercolonial Company's investments in WA land, the potential for capital growthseemed assured. It was an attempt to close this consumer gap, by expanding the landmarket through the offer of cheap land which lay within the reach of the smallinvestor in New South Wales. It was a sophisticated management strategy.

The Intercolonial was not alone in adopting this strategy, which presumablywas the underlying motive of a number of the New South Wales investors whowere also active in Perth in 1885-86. As yet we have no knowledge of the success oftheir investments, although it does seem that many were less soundly based thanthose of the Intercolonial.

It is clear that, as Butlin concluded, the Intercolonial survived the depressionof the 1890s because of its investments in WA. It is doubtful that this was solely theresult of good management. The company's first board of directors showed itself tobe of dubious quality. The success of the company's strategy was dependent on thecontinuation of economic growth in WA. It was good fortune for the Companythat, despite the failure of the Kimberley goldfield, gold finds were made in theYilgarn, Pilbara and Murchison districts, which sustained interest in gold and led tothe massive finds at Coolgardie in 1892 and Kalgoorlie in 1893. It was even greatergood fortune that these gold finds coincided with the depression in the easterncolonies, for although the company was unable to issue a dividend in the years1891-5, trading in WA enabled it to survive.

The career of Thomas Täte is of interest as it was he and John Lawler, whowere largely responsible for the decision to invest in WA. Little is known ofLawler's subsequent career, although he remained a director of the Intercolonialuntil 1914. However, the fortunes of Thomas Täte enable us to see and begin tocomprehend, the effects at an individual level, of a transitional stage in Australia'seconomic life.

As Australia approached the twentieth century and with it the flowering ofcorporate society, it became increasingly difficult to found and sustain the financialdynasties that were a mark of early to mid nineteenth century Australia. ThomasTäte was able to survive the financial depression of the 1890s under the aegis of acorporation whose resources were far greater than those of an individual. However,once he cut himself adrift from the Company and threw his lot in with that ofWestern Australia, his hopes of regaining the affluence of his youth were reduced.As a WA land agent he became dependent on the fluctuations of the local market.While this enabled him to provide a comfortable standard of living foi: his family, itdid not enable him to provide his children with the education or lifestyle that he hadenjoyed as a child.

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Thomas Tate's heyday was during the early years of the Intercolonial Com-pany. His legacy is the Perth streets which bear his name and the names of hisassociates; Täte, Lawler, McCourt, Brandon and Dyson. The links forged betweenPerth and Sydney by the Intercolonial Company in the late 1880s are commemo-rated in the many Perth streets which bear names of Sydney origin.

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