12 THE EARLY YEARS AND THE 
pastoral land will account for the extent to which people living 
on the spot were caught up in the whirlwind of speculation in 
land.! Probably the best instances of this speculative fever 
come from the records of Van Diemen’s Land, where Fenton 
mentions loans made on the security of land at the rate of 
35 per cent. per annum!2 The newly commenced system of 
immigration, by rendering an adequate supply of labour 
for development an apparent certainty, helped in no small 
measure to sustain confidence and to maintain the boom prices 
for land. 
The crescendo of speculation was materially aided by the 
government policy of placing Treasury balances at interest in 
the banks, where they became available for the purpose of 
discounts and loans for land purchases. The first check came 
in 1838, although there had been a revenue deficit of £48,000in 
the previous year. Weather conditions were most unpromising 
in all the colonies, and a further cause for uneasiness was the 
discontinuance of the assignment system of convict labour. At 
this juncture instructions arrived from the Home Government 
to increase the price of land from five to twelve shillings per 
acre, with the avowed object of forcing on the development of 
land already alienated. The chief effect, however, was to 
divert speculation from rural areas to town allotments; but, in 
a final burst, since the order was not interpreted to apply to the 
land already advertised for sale, a frenzied rush was made by 
speculators to secure 300,000 acres at the former price. Never- 
theless, the revenue from land sales rose steadily till 1839,3 
! Population and estimated value of land at Port Phillip: 
Total. 
Year. | Population. 
Buildings. 
Land. 
1837 250 
1838 | 1,800 
1839 3,000 
| R40 5.588 
£ 
1,800 
60,000 
112,000 
220.750 
£ 
3,517 
17,416 
169,542 
379.600 
£ 
5,317 
77,416 
281,542 
603.350 
? History of Tasmania. In 1836 the total paid-up capital of the six banks operat- 
ing in Van Diemen’s Land was only £200,000; but a considerable amount of capital 
was transferred to the mainland between 1837 and 1840 for investment in the 
purchase of town blocks at Sydney and Port Phillip. 
® The Crown revenue at Port Phillip, mostly from land sales, rose in the following 
amazing fashion: 1837, £6,070; 1838, £39,439; 1839. £74.002: 1840. £255.422; 
1841 £144.936: 1842. £87.059: 18438. £73.590.