The following excerpts have been arranged to form a kind of narrative detailing the growth of Sydney's economy in the 1830's, the depression of the 1840's--that had the effect of rerouting the Sydney economy from one based on pastoral income (wool) to a more urban-centered and self-contained manufacturing economy in the 1850's. The transformation helps set the stage for the manufacturing scene in the 1850's and 1860's in which Peter Carey's historical novel Oscar and Lucinda is set.
Excerpts from "Prosperity, Prostration, Prudence: Business and Investment in Sydney, 1838-1851" by Barrie Dystler, in Wealth & Progress: Studies in Australian Business History, Alan Birch & David MacMillan, eds. (London: Angus & Robertson, 1967)
Imports into New South Wales climbed from £ 490,000 in 1831 to approximately £ 3,000,000 in 1840 and bank loans which stood at £ 646,000 in 1836 reached £ 2,616,000 in the second quarter of 1841. Admittedly the figures were swelled by Port Phillip, now open, which provided a rich proportion of these increases and whose financial links were at least as strong with Van Diemen's Land as with Sydney. Yet this merely underlined the fact that the late thirties rode the crest of pastoral dispersion. City merchants handled the great inundation of imports, and the same men were often employed to consign the exports, possesing as they might ships, warehouses, agencies with firms at the other end of the voyage, time for and reputed experience win financial undertakings....Wool was the great medium for securing foreign exchange, just as it was the great lure for investment capital. And Sydney was the centre of credit.
The tightening of credit facilities which ushered in depression was felt in the late half of 1840, and by early November three crushing failures frightened Sydney, Barker and Hallen, the millers showing liabilities of £ 90,000, Robert Anderson, merchant, possessing realisable assets worth £ 40 to discharge debts worth £ 33,000, and Dodds, Blacket and Aird with £ 45,000 to pay. The most persuasive explanation of this slump is [described in its initial phases] as a "liquidity crisis," generated partly by a rapid decline in commodity prices in the colony after recovery from the drought and shortage of 1839; the embarrassment of millers and retailers owed much to this. At the same time as returns from colonial trade dropped, consignments arrived from overseas and bills for these consignments fell due, computed on the old affluent rates. Cost now outweighed income for the importer and storekeeper.
The morphology of failure in the forties deserves a separate treatment and would require at least a detailed study of bankruptcy schedules and regular press reports.... It might be found that men of "wealth and station" were in greater jeopardy that others, and not merely as leading shareholders in companies; men of wealth who lacked station might lack also the personal credit or the international contacts which would expose them to a concatenation of cash calls. The depression further restricted the liberty and credit of colonists...Men who reaped high rents during the flood of immigration at the turn of the decade, found their incomes slashed in the latter stages of the depression, immigration almost having ceased. In the path of pestilence also were hundreds of girues, incompetent, imporivdent, or unlucky, whose fall might have occurred at any time...
By the late 1840's the financial scene began to stabilize. The banks were reformulated and several Australian based insurance companies and financial instutions began to rework themselves along strict guidlines that protected against hazardous speculation and failure. In addition, the Australian Railway system began to develop, stabilizing the ability of manufacture and trade within the country to become less entirely dependent on overseas trade.
In the opening weeks of 1850 these energies were caught up into the Australian Philosophical Society whose objects were the encouragement of the Arts, Sciences, Manufactures and Agriculture. It intended a sub-committee to consider the best means of increasing the exports of the colony, and its earliest prizes were to be rewarded for a paper on colonial timbers, the greatest quantities of cotton and sugarcane grown before May 1851....Drawing specifically on the United States for inspiration, Australia's priority must be the thorough education of its children and the exploration of every one of its advantages. Within this context the Philsophical Society would work...to find a remedy for all mischiefs, to bring resources to light and to awaken the energies of the people...
...Manufacturing and railways should be especially suited to Australia; metal and coal lay unmined, sand abounded for the making of glass pipes to irrigate factory, field and town--sufficient water flowed indeed through the Cumberland plain to turn Sydney into a "city of fountains."
Here was a blueprint, commencing with education and research and moving integrally to a discussion of real resources and complex ends (light mixed with exotica), which envisaged a fully developed and diverse community equipped as a modern nation to advance into the second half of the century, a span of time to be fittingly introduced by Prince Albert's Great Exhibition.
Questions to keep in mind while reading Oscar and Lucinda:
How is the setting for Peter Carey's novel built upon this narrative of the growth of the Sydney economy?
How are the aspirations and dreams of Oscar and Lucinda similar to Australia as a whole--the desire to bring the "faith in progress" to a distant colonized land?
How do the symbolic and real effects of the Great Exhibition (see end of document) figure in Carey's novel as much as the birth of a modern Australia?