At the beginning of March, 1841 there was a devastating fire at the Albion Mills, in Sydney’s Darling Harbour. The owners, Messrs Hughes and Hosking, were shipping agents and importers. Many Sydney merchants had produce stored at the mill and suffered serious losses.
Hughes and Hosking took out large loans from the Bank of Australia after the fire, and also during the drought fuelled, economic depression of the early 1840s. Their debts reached over £150,000 and would be a major factor in the failure of the bank in 1843.
The Bank of Australia was nowhere near as egalitarian as its older competitor, The Bank of New South Wales, which was established during the Macquarie era. Its share register was full of the names of the plutocracy. Dubbed The Pure Merino Bank because it catered to wealthy pastoralists, it had received strong support from the government of the day when founded in 1826.
Needless to say, the press were scathing in their commentary regarding the collapse of the bank and its aftermath. An editorial in The Morning Chronicle of February 8 1845 did not hold back;
THE BANK OF AUSTRALIA, OR “PURE MERINO BANK.”
On Thursday, a special meeting of the proprietors of this once great pillar and agent of squattism was held, of course in conclave, and with closed doors; for the manoeuvres of those pure merino or squatting bankers never have loved the light – the public never had access to their councils – never have seen the secret workings of their machinery, nor have been allowed to peep behind the scenes, Neither would they have heard of the private working of wheels within wheels of the thing, but that the CRASH arising from the fall of the flock of kites which floated in the air, and at which men gazed in admiration so long, rendered certain disclosures inevitable.
By now the assets of the bank were worth very little. However, depositors received their money back after a carefully managed, albeit unorthodox liquidation involving a lottery. After much argument about the morality and legality of such a thing, the politician William Charles Wentworth introduced a bill into parliament allowing it to proceed. It thus became Australia’s first, state approved lottery.
Shareholders were issued with tickets in proportion to their number of shares. However, they were able to sell them at four pounds each. Many working class people were in with a chance of winning some real estate.
Mind you, this all took time, and initially people panicked and started a run on the rival Bank of New South Wales. Fortunately the run was stemmed when the government stepped in and guaranteed its funds.
Meanwhile, the public were incensed when the Bank of Australia’s directors complained about their names being broadcast. A letter to the editor of the Sydney Morning Herald in April 1843 read;
‘If a man steals a pound of cheese, there is clatter enough made about it at the Police Office, and we should laugh in his face if he were gravely to express a wish that publicity should not be given to his name in the newspapers. Why should we act differently towards men, who, taking advantage of a place of trust, use other people’s money with the profuseness of dishonest gamblers?”
It was not until January 2 1849 that the lottery (approved by Royal Assent) took place at the City Theatre in Market Street. The playhouse was at the rear of Burdekin’s ironmongery store. It was quite an occasion. The stage was decorated with flowers and greenery, with plans of the prime properties on display. The first day’s draw was followed by a self-congratulatory, cold collation dinner for the organizers. An account of proceedings appeared in Bell’s Life In Sydney;
The drawing of this much spoken of Lottery took place at the City Theatre, occupying the whole of Monday, Tuesday and Wednesday last. The utmost order was preserved among the agitated expectants of Dame Fortune’s favours, and the arrangements of the Committee were unanimously approved by the ticket-holders. Lists of the drawing, with the prizes allotted to each ticket, will be published in a few days, and in the meantime, parties anxious to ascertain the ‘magnitude of their estates’ will be furnished with the desired information, at the moderate charge of ‘one shilling per head’ on application to Mr Grocott of George Street. A large proportion of the principal prizes fell to the lot of persons in indifferent circumstances; while the ‘nobs’ who sported a hundred or two on the hazard of the wheel, grumbled bitterly…
Years later another newspaper report (Sydney Morning Herald) gave an idea of the excitement generated;
‘Who can ever forget the rows upon rows of anxious purchasers of tickets, male and female, daily and all day long crowded in the pit and boxes of the City Theatre? Who can ever forget the eager looks, the patient and sustained listening to the announcements of the numbers of the tickets as drawn, the uncompromising suppression of an occasional child – for even crying infants in arms were carried by their amiable mothers to the lottery – the hard breathing and the excitement among the crowd, whenever something considered a prize was drawn, the almost audible groans of the old woman as a Fitz Roy fell to her.‘
A ‘Fitz Roy’ was the current slang for something worthless and contemptible, a reference to scandalous behaviour by the Governor and his sons.
Conveyancing, (the legal transferring of titles) was free of charge to the prize winners. This caused amusement when some unsophisticated folk misunderstood. They thought they would receive free ‘conveyance’ to their new properties by coach.
AND THE WINNER WAS…….
First prize went to ticket number 3374, held by a young tenant farmer. Thirty four year old Angus McDonald suddenly found himself owning an 8,000 acre property, complete with mansion house, nearly 4,000 head of cattle and 40 horses. It read like the final chapter in a Charles Dickens’ novel. But life is full of both happiness and heartbreak, and so it would be for the lottery winner. 😎
The Bank of Australia was officially wound up in 1851. Ironically, this was the year gold was discovered, bringing great prosperity to New South Wales.
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