BUSINESS ENTREPRENEURS BECAME INVOLVED HEAVILY IN FOUNDING SOUTH AUSTRALIA. But the particular philosophy of many of those businessmen is essential to understanding their effect on the colony.
George Fife Angas and the others who formed the South Australian Company in London on October 9, 1835, were strongly middle class wealthy merchants and they were mainly Dissenters: they belonged to Protestant churches dissenting from the Church of England as the symbolic faith of Britain’s upper class establishment. As middle class and Dissenters, South Australia’s founders wanted a colony where ambitions wouldn’t be held back by the establishment.
Angas set a strong pattern for the colony’s early business. Although money from wealthy British capitalists was invested in the colony, the self-made middle class Dissenters were at the forefront in enterprise, making the most of business opportunities. They also followed a pattern of going into politics to protect their positions. The middle class Dissenters, who made money in pastoral/mining ventures, joined the limited-franchise Legislative Council to become the colony’s establishment.
They were conscious of gaining rights for the colony and blocking any British establishment intrusion (such as through state aid for church schools). They weren't united in extending those rights to the working class but there was a strong theme of expressing Protestant Christianity in philanthropy and community service.
As with Angas, who was benevolent but not a democrat, these businessmen believed in individual effort. That belief translated into solid business innovation and enterprises that created giants such as Adelaide Steamship and Elder Smith, along with smaller family businesses like Fauldings, Fowlers, Bickford and Burfords, that grew to have national clout. A wider middle class in South Australia was drawn into capitalism through investments in the the copper mining boom from the 1840s.
As even Angas came to realise, South Australia was too limited in resources, too prone to boom and bust, and ultimately too small to hold off entrepreneurs from the bigger eastern states – as Adelaide Steamship, Elder Smith, the Bank of Adelaide and the State Bank discovered fatally in the 20th Century.
South Australia's economy needed government involved. The 20th Century premier Tom Playford, from a conservative Dissenter background, acknowledged this by making government a necessary instrument for South Australia’s survival.
THE SOUTH AUSTRALIAN COMPANY'S CHAIRMAN SEEKS RELIGIOUS AND BUSINESS FREEDOM IN 1830s
George Fife Angas, the first chairman of the South Australian Company, epitomises the middle class Dissenter capitalists who were a driving force in founding the colony. Born in Newcastle on Tyne in 1789, Angas was brought up in Baptist Dissent: exposed as a child to his father’s severe Puritan outlook. Angas took over his father's shipping firm in 1832 but he had already set up his own shipping company in London. He also found a special talent for banking. Also in 1832, Angas received a prospectus of the South Australian Land Company and bought enough shares to become a director. This venture was quashed because Viscount Goderich, in charge of the British Colonial Office, didn't like Edward Gibbon Wakefield’s theory of systematic colonisation. Angas didn't like Wakefield’s scheme, either. But, as a religious Dissenter, Angas's hope for a South Australian colony was “to provide a place of refuge for Pious Dissenters of Great Britain, who could in their new home discharge their consciences before God in civil and religious duties without any disabilities”.
MINERALS BREAKTHROUGH CREATES BUSINESS ELITE AND STOCK HOLDERS
Finding minerals was important in motivating the founding of South Australia. At its second meeting in London in 1834, two years before South Australia was colonised, The South Australian Literary and Scientific Society’s principal lecture was on “The geology of Australia”. The South Australian Company in 1836 appointed the German Johannes Menge as mine and quarry agent and geologist. Menge was not only Australia’s first geologist but also has been called the father of Australian mineral exploration. He travelled widely and helped make the first significant copper find. South Australia’s early colonial administrators also played an early role in describing the colony’s geology. The second governor, George Gawler (1838-1841) made his own geological contributions. The first surveyor general William Light and his staff were asked to site the capital near water, coal and building stone resources. This continued after Light died. During the 1840s, surveyor general Edward Frome reported on geology during his exploration. His deputy, Thomas Burr, presented an early geological report from exploring South Australia’s southeast region in 1844. Appointed mineral surveyor in 1846, Burr conducted Australia’s first geological survey and wrote the first geology book Remarks on the Geology and Mineralogy of South Australia published in Australia. Its overview identified Cambrian Age rocks for the first time in Australia.
South Australia gave Australia its first mining boom in 1845-51, after a major discovery of copper led to a “monster mine” at Burra. The first significant copper find had been in 1842 at Kapunda, and more small mines followed over the next five years. By 1850, the township of Burra was the largest inland settlement in Australia, more than double the size of the current major cities of Perth and Brisbane. Kapunda also grew into a large town. Minerals accounted for more than two thirds of South Australia’s exports, rescuing the colony’s economy from collapse. As coppermania grew, 49 active metal mines were operating in the colony by the end of 1850. Of those, 38 were copper mines, with Burra and Kapunda dominating. Eight-six people were working at a remote Eyre Peninsula mine in the far west. The Burra copper boom had the added benefit of attracting a many outside geologists and their knowledge. This built on three basic sources of expertise in South Australia: the educated founding elite from Britain, the practical miners from the English county of Cornwall, and Germans with professional and practical experience. Johannes Menge, the geologist employed by the South Australian Company, was dismissed in 1838 for eccentric behaviour. He went on exploring and was a key to the Kapunda copper discovery. The colony’s mineral surveyor Thomas Burr became general superintendent of the Burra mine in 1847. James Trewartha and Benjamin Babbage followed as mineral surveyors before the position lapsed in 1852.
Georg Bruhn, who confirmed the discovery of gold in Victoria in 1851, had been among the German and other geological experts flooding into South Australia during the Burra cooper boom. In 1848, Dr Bruhn, a German doctor, advertised his services in Adelaide as a mineralogist, geologist, miner and chemist. He received finance to explore for the colony’s minerals. But it was his mineral expedition in Victoria in 1851 that confirmed the discovery of gold and set off a rush that had a major effect on South Australia. About 28,000 people left South Australia in 1852-1853 from a European population of 63,700. Even the rich copper mining operations at Burra were largely suspended due to lack of labour. Smaller mines soon closed permanently. Within this exodus were most geologists based in South Australia during the copper boom, including Thomas Burr, James Trewartha, and Carl Zacchariae, who had lead a team of German miners working the Wheal Gawler lead-silver mine at Glen Osmond. Even Johannes Menge, South Australia’s first official geologist, who had lived in the colony for 15 years and was aged 64, walked to Victoria but died soon after he arrived. The Victorian gold rush put a serious brake on geology in South Australia as a discipline and a profession. It was only restarted when the University of Adelaide was opened in 1874 and with the Geological Survey of South Australia in 1882.
RISE AND FALL OF SOUTH AUSTRALIAN BUSINESS ELITE'S INSTITUTION
The Bank of Adelaide was founded in 1865 by a core of the South Australian social establishment. The bank’s first directors made their money through the Burra Burra copper boom, pastoral runs, speculating in land, or retail. The five directors were:
• Henry Ayers (chairman) who became rich from the Burra Burra copper mines, as secretary in charge of 1000 men. Ayers was South Australian premier several times in 1863-73.
• Robert Barr Smith came to Adelaide in 1855 to join Elder & Co. From a firm mercantile and shipping base, Smith and Thomas Elder expanded into pastoral and mining. Their risks in 1860-61, with a £80,000 loan to develop Wallaroo and Moonta copper mines, brought enormous wealth. They opened vast agricultural land and stock/station agency network.
• Thomas Magarey: Arrived in 1845 with brother James and a Lancashire milling background. Four years later, they succeeded John Ridley as owners of Hindmarsh flour mill. In 1859, Thomas leased a big Naracoorte pastoral run with sheep, cattle and horses. He had other properties in the south east and Eyre Peninsula.
• Thomas Waterhouse was an early shareholder and later director of Burra mine. With brother John, he ran a grocery business at King William and Rundle streets ("Waterhouse's corner"). During the Victorian gold rush exodus, Waterhouse profited from investing heavily in Adelaide city centre land.
• George Harris joined George Scarfe in 1866 in a Hindley Street ironmonger business that became hardware sellers, later retailers, Harris Scarfe.
ANOTHER SOUTH AUSTRALIAN BUSINESS GIANT RUINED
Adelaide Steamship Company – a national shipping giant – was started by South Australian businessmen, including Robert Barr Smith, Thomas Elder and Andrew Tennant, in 1875. It aimed to control goods transport between Adelaide and Melbourne and to provide an efficient passenger service. Adelaide Steamship joined with Spencer's Gulf Steamship in 1882 to form a fleet that circled the coast from Derby in Western Australia to Cairns in Queensland. Its ships were supported by offices in almost every major Australian port. By World War II, the company owned 30 ships. After the war, declining trade forced it to diversify into towage, shipbuilding, and carrying salt, coal and sugar. During the 1940s and after the war, declining trade forced the company to diversify into towage, shipbuilding, and carrying salt, coal and sugar. Adelaide Steamship’s interstate fleet merged in 1964 with McIlwraith McEacharn in a new company, Associated Steamships, with Adelaide Steamship holding 40%. The new company developed the world's first purpose-built container ship, MV Kooringa. Bulkships Ltd, 40% owned by Adelaide Steamship, bought all shares in Associated Steamship in 1968. In 1977, the company's interest in Bulkships was sold and Adelaide Steamship Company ended its link with ships. But the company kept its interests in tug boats and, by the late 1980s, Adelaide Steamship was one of Australia’s oldest surviving industrial companies.
STARTING AS A PASTORAL AGENCY
Alexander Lang Elder arrived in Port Misery (now Port Adelaide) in 1839 aboard the family-owned Minerva to launch a new arm of his Scottish-based merchant and shipping business. Alexander’s merchant family had decided there was real potential in three-year-old colony and he was dispatched to both set up business and explore opportunities – particularly in goods, such as wool, that could be returned to Britain for sale. Alexander battled to consolidate the business until the copper boom in the mid-north in 1842 saw him branch out as a metal broker and enjoy major success. Alexander’s brothers, William, George and Thomas (in 1854), joined Alexander in Adelaide but it was Thomas who stayed on while the other three eventually returned to Scotland and England. Thomas Elder realised the potential of pastoral outback holdings and he encouraged the family business to import camels to provide transport between the pastoral properties. This unlocked the vast interior of Australia, tapping into the Great Artesian Basin water that made grazing viable. He laid the foundations of a national wool broking and rural agency empire that would be built on the back of sheep but funded with cash from the copper boom; cash that enabled him and his peers to buy huge amounts of pastoral land. After George returned to Scotland, Thomas Elder formed Elder, Stirling & Co, a partnership with Edward Stirling, Robert Barr Smith and John Taylor. In 1856, Barr Smith married Thomas Elder's sister Joanna, and when Stirling and Taylor's retired in 1863, Barr Smith and Thomas Elder formed Elder Smith and Co.
Elders Ltd is back in Adelaide and on track to being a great Australian company again. It has returned to the ASX top 300 Australian companies and won the large business turnaround award in 2015. Elders Ltd’s turnaround came from a strategy in 1993 to revert to its origins in Alexander Lang Elder's 1839 South Australian vision for an agribusiness. In 1993, Elders Pastoral was sold out of the Foster’s group where it had landed as a spillover of 1980s corporate takeover games by Robert Holmes a Court and John Elliot. Elders return-to-rural strategy included buying the Australian Agricultural Company, one of Australia’s oldest businesses with one of the world’s largest beef cattle herds. Bought by major shareholder Futuris Corporation, Elders continued its rural strategy by buying Charlton Feedlot in Victoria in 1996. It launched Australian Wool Handlers and gained more than 60% of the national wool clip. In 1998, it bought Primac Holdings in Queensland and a share in Killara Feedlot in NSW and rescued Victoria Producers to set up EldersVP. Elders Finance was sold to Hanover Finance in 1999. In 2001, Elders floated Australian Agricultural Company. In 2009, Elders changed its name from Futuris Corporation to Elders Ltd. Its Rural Bank became a fully-owned subsidiary of the Bendigo and Adelaide Bank Group In 2010. In 2013, Elders completed its return to a pure agribusiness with the final sale of its forestry and automotive units. By 2014, the company was operating as one of Australia and New Zealand’s largest rural distribution systems with 226 rural branches.
AN INSTITUTION FOR THE WHOLE STATE CRUMBLES
Premier Tom Playford made the Savings Bank of South Australia – a statutory institution managed by trustees – a fully state-government-owned bank in 1945. This was a response to the federal Labor government move to formalise the Commonwealth Bank of Australia’s role as the nation’s central bank. Under this arrangement, the Savings Bank of South Australia had to lodge £8 million in a special reserve account with the Commonwealth Bank. By making the Savings Bank state owned, the Australian constitution exempted it from this payment. Playford also extracted an £8 million loan from the Commonwealth Bank to the South Australian Housing Trust at only 1% interest. The Savings Bank wasn't South Australia's first government-owned bank. In 1896, the State Bank of South Australia was started as the state government bank, in the wake of other Adelaide banks collapsing during 1890s land speculation. The role of a state government bank was resented by the private banks, especially in the 1920s when the State Bank of South Australia was empowered by the Gunn Labor government to provide 1000 homes for returned servicemen and the needy in the new suburb of Colonel Light Gardens. Playford increased the role of the State Bank and the bigger Savings Bank of South Australia. He used them was a key tool of his vision for South Australia’s rapid economic and industrial development, including financing Electricity Trust and the Housing Trust. The Savings Bank allowed people to deposit savings or borrow for mortgages, while the State Bank was used for larger projects.
TRADITION OF MIDDLE CLASS PROTESTANT FAMILY ENTERPRISES SOLIDIFIES IN 19th CENTURY
William Bickford worked as a chemist’s assistant after arriving, aged 23, in Adelaide in 1839. Next year, he opened his own shop in Hindley Street with a borrowed £220. Its success allowed him to move to a bigger shop down the street. Bickford did well enough by 1846 to build a large house, later called “Benacre”, at Glen Osmond. He died five years later, leaving his wife Anne pregnant and with four young children (William, Harry, Elizabeth and Edward). Anne Bickford engaged qualified chemists Edwin Page and Robert Hutton to carry on the business for 14 years. Son Harry, now a qualified chemist, returned from England to join his mother in the business as Bickford and Son. Eldest son William in 1871 joined A.M. Bickford and Sons that developed drugs and popular products such as Sal Vital, Dexal and Sopaderm. Large offices and a warehouse at 42-46 Currie Street (on Leigh Street corner) became the company's headquarters from 1879. From 1874, their factory in Waymouth Street made cordials (including lime juice and raspberry vinegar). An expanded factory had Monsieur H. Foureur in charge of aerated drinks. When their mother died in 1877, the two sons continued expanding, including to Perth and amalgamating with competitor Felton Grimwade & Co. of Melbourne. In 1914, the Adelaide manufacturing laboratory moved to Waymouth Street next to the cordial factory. A major change for Bickford’s family identity came in 1930 when it combined with similar companies from all states, except Tasmania, to form Drug Houses of Australia (DHA), with £5,000,000 capital.
F. H. Faulding & Co pharmaceutical company started as a pharmacy shop opened by Francis Hardey Faulding at 5 Rundle Street, Adelaide, in 1845. With the pharmacy flourishing, Faulding bought a warehouse in Clarence Place for its manufacturing and wholesale arms. In 1861, he partnered with another Yorkshireman, Luther Scammell, who’d trained at Guy’s Hospital, London, and arrived in Adelaide in 1849 to practise medicine at Burra mine. Scammell became sole owner after Faulding died without children in 1868. He appointed Philip Dakers as the company's London buyer and, in 1876, built a warehouse in King William Street, Adelaide, later expanding to James Place. He was forced to retire in 1889 when the Bank of Adelaide threatened foreclosure after failed mining and pastoral speculations. Sons Luther and William bought the manufacturing and wholesaling operations in 1888; its shops were sold to John White to cut debt. The company expanded to Perth and Sydney. In 1921, Faulding & Co. became a private company, with Luther Scammell as chairman and managing director. In 1935, elder son Alfred took over. In 1971, Faulding's bought Adelaide's Jasol Chemical Products. Dr Ed Tweddell became managing director in 1988 and, with CSIRO, developed drugs under the Keating government’s “Factor f” scheme. In 1999, Fauldings were promised $40 million in federal development funding. Faulding Pharmaceuticals expanded in the northern hemisphere but, in 2001, it was taken over by the Mayne Nickless group as Mayne Pharma – bought out in 2007 by US Hospira conglomerate.
D. and J. Fowler (Australia) was started by Scottish brothers David and James Fowler, in 1854, as a grocery shop in King William Street, Adelaide, that became one of Australia's largest wholesale grocers. After James Fowler died in 1858, a third brother George joined and ran the company from King William Street from 1865 while David took over a London office. In 1881, Fowlers built a warehouse at Port Adelaide to store 30,000 tons of merchandise. Branches opened in Fremantle, Broken Hill and Kalgoorlie. Besides gaining a Shell dealership, Fowlers started a shipping agency for imports and exports including wool, wheat, meat and flour. They built Paou Chung Factory on King William Road and took over Barnfield & Turner’s London Condiment Company at Maylands. They renamed H. B. Hanton's at Fullarton as Lion Preserving Company and expanded into canned fruits with a factory at Nuriootpa (later sold to R. McEwin and Sons of Glen Ewin fame). Henry Harford in Mill Street, Adelaide, became Lion Confectionery Works. Fowlers contracted farmers in South Australia's south-east to grow chicory for Lion coffee/chicory essence. Fowlers introduced packaged tea with Paou Chung (1883) and Amgoorie (1896) brands. Adelaide Milling (bought in 1895), Robur Tea, Adelaide Bottle Company and Waltons added to the firm’s diversity. The Lion Factory, packaging self-raising flour and other goods, opened on North Terrace, Adelaide, in 1907. In 1899, D & J Fowler became a limited liability, with 2,000 shares given to employees. In 1982-83, it was taken over by the Adelaide-based Southern Farmers.
SOUTH AUSTRALIAN INVESTORS LEARN TO CHANNEL WEALTH FROM ELSEWHERE INTO HOME STATE
South Australia's longest mining based boom lasted from the late 1890s until 1928 – but the source of the boom was in New South Wales and Western Australia. South Australians had started investing in mining at Kapunda, Burra, Moonta and Wallaroo in the 1840s. Adelaide Stock Exchange and its local investors enjoyed a mining boom when silver, lead and zinc were discovered at Broken Hill in 1883. Ten years later, gold was discovered at Coolgardie and Kalgoorlie in 1893.
KEEPING ALIVE SOUTH AUSTRALIAN BUSINESS TRADITION INTO 21st CENTURY
Samuel Smith was a successful brewer in England before he migrated to South Australia in 1847 and worked as a gardener for George Fife Angas at Angaston. In 1849, Smith bought 30 acres for his a vineyard and orchard he called Yalumba. Smith and his son joined the rush to Victorian goldfields in 1852. On his 16th shaft, he struck gold and returned to Adelaide £300 richer. He spent £80 on 80 acres that he let out and spent the rest on equipment, cellars and another house. In 1852, he made his first wine and, by 1862, had nine acres planted with shiraz. He gave cuttings to neighbours and bought their grapes to make wine. In 1863, he produced 60 hogsheads (13,638 litres). Yalumba wines soon won repute, with a bronze medal at the 1866-67 Intercolonial Exhibition, Melbourne, and silver at the 1878 Paris Universal Exhibition. Son Sidney Smith took over the estate in 1888. In 1923, Samuel Smith & Son became a wine merchant, presenting a blue chip portfolio of national and international wines, spirits and premium ales. In the 1980s, managing-director Robert Hill-Smith oversaw a buyout of family shares to consolidate the company's independence. Having made a strong push into exporting, the company operates throughout Australia from its head office in Angaston. Yalumba wines have been style leaders, controlling quality through its own vine nursery and cooperage. It has introduced varieties such as viognier and tempranillo. It also led the industry in environmental performance; reducing carbon emissions, increasing biodiversity and exploring organic viticulture.
Horwood Bagshaw manufacturing and dealership chain, at Mannum, is the amalgam of three 19th Century family agricultural machinery firms: Horwoods, J.S. Bagshaw and David Shearer. Joel Horwood, a mechanical engineer from Lancashire, started the Colonial Iron Works in Hindley Street, Adelaide, in 1849. Three of his four sons followed him into engineering but went to Victoria. In Adelaide, Horwood & Sons, supplied the growing mining industry. When Joel Horwood died, his firm eventually failed. In 1867, Horwood’s third son Joseph returned from Bendigo Iron Works where he'd been building mining equipment. He supplied a 10-head stamp battery at Montacute and Echunga gold mines. He built a crushing plant in Barossa Valley in 1872 before working on the Moonta copper mines. In 1875, he managed Francis Clark & Sons machinery dealership on Grenfell Street, Adelaide, before, with Samuel Strapps, starting a machinery and sales business in Currie Street. Horwood's specialty was well drilling and he built the first steam-powered rock drilling machine, as well as pioneering tube-lined bores. His fence-wire tensioning device and windmills won show prizes. The business became J. H. Horwood and Co. in 1912. Horace Horwood was apprenticed to his father's company in 1903 and sold farm machinery from Currie Street showrooms. In 1924, with the takeover of long-standing South Australian agricultural machinery company J.S. Bagshaw & Sons, Horace Horwood became general sales manager in Horwood Bagshaw. Around 1960, the company bought David Shearer of Mannum.