10 THE EARLY YEARS AND THE 
induced by the grant of self-government. Shortly after Gover- 
nor Darling took charge of the administration in 1826 a group 
of British capitalists formed the Australian Agricultural 
Company! with the object of engaging in agricultural and 
pastoral operations in the colony. Plans were made for wheat- 
growing, stock-breeding, and coal-mining on a very ambitious 
scale; and these were based on a large grant of 1,600,000 acres 
of land at Port Stephens, on the Liverpool Plains, and on the 
banks of the Peel River. The nominal capital was stated to be 
one million pounds, and was mainly contributed from Great 
Britain. 
The introduction of this amount of capital into a community 
of fifty thousand people was the real origin of the crisis which 
followed. Huge purchases of cattle and sheep were made which 
had the effect of driving prices for stock up to unprecedented 
heights, and commenced a very fever of speculation. ‘Many 
who had been content before to earn a modest livelihood on the 
farm now mortgaged their lands to buy stock, those who had 
stock bought more, while many who saw the progressive value 
created from day to day bought and sold on speculation.’2 
So general was the confidence felt in these transactions that 
credit was expanded in all directions; and both settlers and 
speculators purchased far beyond their capacity, finding them- 
selves ultimately unable to repay either principal or interest. 
Attention was chiefly centred on the raising of sheep to the 
neglect of almost every other branch of rural industry. 
The results of such a relatively large importation of capital 
are directly traceable in the figures for overseas trade. Imports 
commenced to mount rapidly, and a situation of the ugliest 
complexion quickly developed. How large was the discrepancy 
between inward and outward trade can be seen by the statistics 
for the years concerned.? 
L Vide Records of the Australian Colonies, Parliament of the Commonwealth. 
¥ Braim, History of New South Wales, pp. 100 ef seq. 
Imports AND Exports of NEw SoUuTH WALES 
Deficiency. 
1827 
1828 
1820 
& 
362,324 
570,000 
601.004 
x 
70,314 
90,050 
161.716 
* 
292,010 
479,950 
439.288