No Idle Rich: The Wealthy in Canterbury and Otago 1840-1914

Published by University of Otago Press

PO Box 56 / 56 Union St West, Dunedin, New Zealand

Fax: 03 479 8385 / Email: university.press@otago.ac.nz

First published 2002

Copyright © Jim McAloon 2002

ISBN 1-877276-23-5 (print)

978-0-947522-03-2 (Kindle)

978-0-947522-04-9 (ePub)

978-0-947522-05-6 (ePDF)

Published with the assistance of The History Group,

Ministry of Culture and Heritage

Ebook conversion 2016 by meBooks

CONTENTS

Front Cover

Title Page

Copyright

PREFACE

CHAPTER ONE

Wealth, Class, Power: Concepts and Frameworks

CHAPTER TWO

‘Wealthy and Respectable’: Agricultural and Pastoral Businessmen

CHAPTER THREE

‘Perseverance, business ability, and probity’: the World of Urban Wealth

CHAPTER FOUR

‘The partnership of husband and wife’? Wealth and the Colonial Family

CHAPTER FIVE

‘The democratic tendency of the present times’: Wealth and Politics, 1853–1914

CHAPTER SIX

‘A sort of vindictive legislation which is to be deplored’? The Wealthy and Closer Settlement, 1891–1912

CHAPTER SEVEN

‘I have done fully my part in improving the whole of the District’: Wealth and Local Influence

CHAPTER EIGHT

‘When he dies his most flattering requiem would be he left a lot of money’: Conclusions and Implications

NOTES

BIBLIOGRAPHY

INDEX

Back Cover

MAPS

Main centres and provinces of New Zealand

Canterbury

Otago

PHOTOGRAPHS

A section of photographs appears between pages 112 and 113 .

J. M. Ritchie and three of his sons (plus dog). The solemn little fellow at his father’s left is George Ritchie, who followed his father as General Manager of the National Mortgage and Agency Co. (Hocken Library c/neg E565/3)

PREFACE

I have lived with the themes with which this book is concerned, wealth and power in a colonial context, for over a decade now. This book, dealing with the richest settlers in Canterbury and Otago from the 1840s to 1914, is a much- expanded version of the doctoral thesis which I presented at the University of Otago in 1993. It is my hope that this book will contribute to an understanding of the colonial New Zealand economy, of the class structure of colonial society, of the values and perceptions of the rich, and of how the rich justified and maintained their position in colonial society. While the book is focused upon two provinces in a small settler colony, the themes are of more than regional interest. The wealthy of Canterbury and Otago were part of the revolutionary expansion of nineteenth-century capitalism and, I argue, were part of the vigorous and dynamic British middle classes who made and were made by that expanding capitalism.

Assigning this book to one of the ever-increasing number of historical specialisations will, I hope, prove difficult. Although there is much in this book about rural history, it is not rural history; much about family history, it is not family history; much about gender and colonisation, it does not fit that genre; much about political history, it does not fit there either. Various themes have appeared in journals devoted to historical geography, regional studies, business history, as well as national journals of history. In the end the approach taken here is similar to that suggested by Keith Wrightson as appropriate for the study of economic history; it is an approach which emphasises ‘the social, cultural and political contexts of economic activity’ and is concerned with ‘not so much of a special class of facts … as of all the facts of a nation’s history from a special point of view’.¹

There are one or two points about sources and method which I would like to note. The footnotes to each chapter and the bibliography at the end of the book give the detailed citations for the sources on which this study rests. That this book owes much to the work of many other scholars, in New Zealand, Australia, the United States, Canada, England, and Scotland, will be obvious. In terms of the archival sources, two above all stand out. One is the wills of the 1042 rich settlers discussed here. A number of scholars have used probate valuations as evidence for the structure of wealth in various societies, and inventory lists have been used to reconstruct material culture and household economies in a number of studies. I have found probate files enormously rich not only in terms of the quantitative information they present on wealth, but also in terms of the insight they provide into family life and the values of the colonial wealthy. The other source which stands out as fundamental to much of this book is the National Mortgage and Agency Company records, held in the Hocken Library. This enormously comprehensive collection provides – through the private letterbooks of the Company’s exceptionally astute General Manager, J. M. Ritchie – great insight into political and economic affairs from the late 1870s until 1912.

I have incurred many debts over the thirteen years during which I have worked on the ideas in this book. In working on the original thesis I was fortunate to be supervised by Professor Erik Olssen and Dr Tom Brooking in the History Department at the University of Otago. The rigorous support which I received from them was critical to the successful completion of the thesis, and its later conversion into this book. I was also fortunate to have the support and assistance of Dr Terry Hearn, at that time in the Department of University Extension, University of Otago. Terry’s own familiarity with quantitative methods encouraged me in my work, and his generosity in reading a late draft was much appreciated. I owe an older debt to Dr Len Richardson, formerly of the Department of History, University of Canterbury, who not only taught me to write by supervising my MA thesis, but also generously gave the final draft of the doctoral thesis the benefit of his meticulous eye. I am also indebted to his continuing belief in the importance of historical class analysis. The late Rob Steven first taught me about class analysis, did so with considerable rigour, and I honour his memory. When the thesis was presented I benefited from the perceptive comments of Professor Russell Stone (emeritus, University of Auckland) and Professor Stuart Macintyre (University of Melbourne).

I must also thank the librarians, archivists, and custodians of documents – too numerous to name individually – upon whose services I have depended. The Hocken Library has been magnificent as always, as has the Christchurch branch of Archives New Zealand. In 1990 the Registrar and staff in the High Court at Dunedin willingly allowed me access to their strongroom, and left me alone with a century’s deposit of wills and dust. Their co-operation and trust was much appreciated. The Dunedin branch of Archives New Zealand subsequently acquired responsibility for these wills and for probate registers, and I thank the staff of that branch for their assistance. I am also most grateful to the archivists and curators of manuscripts and of photographs at the Otago Settlers Museum, the Canterbury Museum, and the Macmillan Brown Library at the University of Canterbury. I thank all these institutions, and Fletcher Challenge Ltd, for permission to use archives cited and quoted in this book.

Since I completed the doctoral thesis I have lectured in history at Lincoln University. Whatever the ambiguities of a historian’s position at a predominantly agricultural and natural-resources focused institution, it remains the case that Lincoln has done something that several other universities in New Zealand have failed to do: given me a job. For that I am grateful, as also for the support and funding in terms of conference and sabbatical leave. I thank my colleagues and students in the University’s Human Sciences Division for their support and interest as the ideas in this book have been worked out (even if the students were sometimes a captive audience). Special thanks in this regard go to my colleagues Greg Ryan and Harvey Perkins, and to Jenny Ross, Divisional Director, who has consistently provided the practical help of endorsing applications for conference and sabbatical leave.

I have tried out various ideas presented in this book at a number of conferences both in New Zealand and overseas, and in a number of articles written for academic journals. To the participants, editors, and reviewers in those conferences and journals I am grateful for advice. In 1999 I was privileged to have a position as visiting associate at the International Social Science Institute in the University of Edinburgh. That position gave me the space to write a late draft of the book, and far more importantly allowed me to discuss the central themes with members of the University’s Department of Economic and Social History. I thank Professor Ged Martin for his initial and ongoing encouragement regarding the visiting associate position, Dr Halla Beloff, Director, and Dr Paddy Bort, assistant director of ISSI for their assistance and encouragement, and I am particularly indebted to Professor Bob Morris and Dr Stana Nenadic, and their colleagues in the Department of Economic and Social History, for their support and criticism of the ideas in this book. I also thank Wendy Harrex at University of Otago Press for her initial encouraging response to a book proposal and for her helpful advice on drafts.

My farming in-laws have instilled in me a greater appreciation of their way of life; I hope that our association has helped me understand a little of some of the farmers who appear in this book. I am particularly indebted to my brother- in-law, Graeme Dawson, whose own considerable knowledge of and interest in rural history encouraged me to think that the thesis was worth making into a book. My parents, also, have given considerable moral and material support, not least in the various expeditions mentioned above.

My debt to Jenny encompasses all these things and more, and so the book is dedicated to her with love.

JIM MCALOON

Christchurch, February 2002

Main centres and provinces of New Zealand referred to in the text.

Canterbury, showing places referred to in the text.

Otago, showing places referred to in the text.

CHAPTER ONE

Wealth, Class, Power: Concepts and Frameworks

In 1862 a young middle-class Scotsman, Charles Edward Douglas, ‘sail[ed] into Port Chalmers on the road to fortune’. He did not, in the event, take that road. Forty years later, after half a lifetime exploring South Westland, Douglas looked back on what might have been:

Had I remained at home or even settled down in the Colonies, I might now be a respectable father of a family, passing every day the same lamp post & at the exact time. I don’t think I would ever have become an elder in the Kirk, but I might have been a comfortably situated old foggy, a tooth in a wheel of a Mercantile Machine, with just sufficient thinking powers to gabble on the topics of the day, but with my reasoning powers dormant.¹

Two years later, John Macfarlane Ritchie, another son of the Scottish middle class, disembarked at Port Chalmers. Similar to Douglas in education and social standing (Ritchie’s father was a Presbyterian minister who died young, while Douglas’s was a bank accountant), Ritchie rose through ability and fortunate connections to a position of great wealth and influence in the colony. Both Douglas and Ritchie left invaluable records of their respective endeavours; while Douglas now leaves our account as he chose not to seek worldly success, much will be heard of Ritchie in what follows.

This book aims to deal systematically with the wealthy settlers of Canterbury and Otago from 1848 to 1914. Previous work on wealth in colonial New Zealand has tended to be fairly descriptive, and to focus on the easily identifiable wealthy, whether pastoral or commercial. Stevan Eldred-Grigg’s A Southern Gentry is the best-known study of pastoral wealth; it is positively restrained in comparison to his later populist and occasionally fictionalised The Rich. Russell Stone’s work on nineteenth-century Auckland is illuminating on a highly visible and interlocking commercial network.² More recently, the journalist Graeme Hunt has extended his annual ‘Rich List’, published in the National Business Review, into a historical form, attempting to describe the richest individuals and families in New Zealand since the 1830s. In addition, there are many company histories, often commissioned to mark a centennial, and of varying scholarly use.³ A number of biographies of families or of individuals have also appeared recently; these, too, vary in usefulness but the best give excellent case-studies of accumulation strategies.⁴

By focusing on a single institution, and on prominent or easily identified individuals, the existing work has risked omitting the obscure and the self-effacing. Studies of individuals, companies, or a prominent and highly visible group may not reveal much about the propertied as a class. We do not know if the firms or people discussed are representative of wealth, or even what proportion of riches they represented. An exception to this concentration on the highly visible is Margaret Galt’s studies of wealth and income from the 1870s to the 1930s.⁵ This work, however, is essentially statistical and, while giving important evidence of broad trends, does not attempt to address social context.

The central issues considered in this book may be briefly stated. Who were the rich in colonial Canterbury and Otago? How did they get their wealth? How did they try, in rapidly changing circumstances, to make sure they kept it? It will be argued that the colonial wealthy of Canterbury and Otago were a thoroughly bourgeois group, living their lives by the bourgeois values of thrift, hard work, and moderation. This is not to deny that very considerable disparities of wealth existed in those provinces. They did, as some historians have made clear. But the colonial rich were emphatically not an idle rich, and in their devotion to the work ethic lay one secret of their survival and influence. This point needs stressing, for many writers, particularly sociologists and journalists, have been unduly influenced by the myth of an ‘aristocratic tradition’ among South Island pastoralists – a myth which might be described as being by Reeves and Sinclair out of Eldred-Grigg.⁶ This myth persists; it has recently appeared in at least two important works on the British Empire.⁷

IDENTIFYING THE RICH

If previous work on the colonial wealthy has concentrated on the well known and highly visible, a more systematic approach is needed. For any systematic database of the wealthy, probate records are the best available source. Probate records formed the basis of Margaret Galt’s statistical analysis and have been the basis of some studies of wealth in Britain and Australia, most notably by W. D. Rubinstein.⁸ Rubinstein’s work has provoked much comment and debate, but whatever the shortcomings of probates as a source in the social history of wealth,

the compelling reason for their use is that there is nothing else. Taxation records do not exist for such lengthy periods [and, in New Zealand, are by law unavailable] ...; other types of evidence about the very rich or wealth distribution throughout society, such as bank records or family accounts, tell us about selected individuals or groups whose typicality or randomness is unknown.⁹

It must be stressed that New Zealand probate valuations include all forms of property. That is, ‘real’ property, or land and buildings, are included as well as ‘personal’ property, such as shares, livestock, and mortgages. This is a very important point, since English probate valuations did not include real property until 1898. This lack in the English probate files has led some scholars to criticise Rubinstein severely; put simply, it has been contended that Rubinstein’s finding as to the predominance of financial capitalists over industrial capitalists is an effect of the sources, since the latter held a large percentage of their wealth in real estate.¹⁰ Without getting into the debate on ‘British decline’, in the context of which these criticisms have been made, we can note that whatever the problems of New Zealand probates, a failure to include real property is not among them. At best, a New Zealand probate file will contain a complete and detailed inventory of assets and debts, as well as the will of the individual concerned. The will itself often has other valuable information about family relationships and even the beliefs or values of the testator.

Certainly there are problems with the use of probate records. The most significant is that they state wealth at death, and are therefore biased towards the elderly. They may give little indication of the process by which wealth was obtained, although often the inventory makes this point obviously enough. Perhaps more importantly, selection of the wealthy by net worth at death omits those who may have been wealthy during their lifetimes but were unlucky enough to lose their fortunes, or those who may have passed their fortunes on before death. The handing-over of property before death is difficult to trace, and the possibility must simply be accepted. The evidence contained in the wills themselves, however, suggests that it was done infrequently.

Selection by wealth at death incorporates the ultimate measure of financial achievement: not only the accumulation of wealth, but the keeping of it. The nature of this achievement is emphasised by a study of one Canadian city, where there was a very considerable frequency of mobility both up and down the social scale, to the extent that bankruptcy among the entrepreneurial class was as common as enduring wealth. It has been noted that ‘the calm, solid facade of power which a static group portrait shows masks the turmoil, striving, anxiety, and disaster that frequently characterised the experience of the individual members of the entrepreneurial class’.¹¹

The core sources for this book, then, are the wills of all individuals in Canterbury and Otago who died leaving (until 1918) £10000 or more. From 1918 to 1925 the threshold was £15,000 and from 1925, £20,000. These thresholds have given 1042 estates.¹² No systematic attempt was made to count estates after 1929, for very few mid nineteenth-century immigrants were still alive then (although the richest man in Dunedin, John Roberts, who was born in 1845 and came to Otago in 1868, lived until 1934). The higher thresholds after 1918 reflect the significant inflation during and after the First World War, but these have been set at those levels more for simplicity than out of any other consideration. Even so, inflation made £15,000 in 1918 worth the same as £10,000 before the war, and a fortune of £10,000 before 1914 was roughly equivalent to one million dollars in 1992.¹³ No lower threshold than £10,000 has been used, principally because the period up to 1896 was not characterised by sustained inflation. For the period up to 1920, death duty registers are available which give values for every estate where probate was granted. After 1920 these registers are not available but the Supreme Court registers often recorded valuations as well. It is, therefore, possible to be reasonably confident that few relevant estates have been omitted.¹⁴

It will be noted that a monetary figure has been adopted as a yardstick, in preference to some other criterion such as the possession of a certain number of sheep or of acres. The justification for a monetary figure is simple: it is the one measurement that can be applied, without adjustment, across all categories of economic activity. A focus purely on landed wealth, or on the urban rich, would by its nature be unable to tell us very much about the wealthy as a whole, particularly since in New Zealand, as in other colonies, the same individuals frequently had a foot in more than one camp. Many of the richest financiers possessed landed property that alone would have qualified them for inclusion as rich. This book, therefore, attempts to transcend the rural-urban divide that exists in many studies of wealth in settler societies and in Britain.¹⁵

The wealth thresholds given above may seem low. But the reality was that, on an international scale, the New Zealand rich did not loom large. Setting a higher threshold would have simply resulted in a database too small to be of much statistical use. Nor is the measure of wealth chosen that broad. The £10,000 threshold, between 1908 and 1914, represents in Canterbury 187 wills, 6.3% of the total. Across all the rich estates studied here, 45% were between £10,000 and £20,000, and 23% were £40,000 or more. To have used a much higher threshold would, moreover, have ignored the fact, as Margaret Galt noted, that ‘the top of the New Zealand wealth hierarchy was equivalent to the second rank in New South Wales, the third rank in Britain, and would not even have rated as wealthy in the United States’.¹⁶

The Setting

Canterbury and Otago were both planned settlements, although it could be argued that the grand visions of systematic and religious colonisation had little to do with the way in which the two provinces actually developed. Wakefield’s colonial theory was intended to relieve surplus population and capital, and to transplant hierarchical English rural society overseas. Systematic colonisation was born both out of the revolutionary social change experienced in Britain’s Industrial Revolution and of the tortured workings of Wakefield’s twisted mind. Indeed, Wakefield possessed an unrivalled capacity for self-deception, exhibited most scandalously in 1826 when he kidnapped a fifteen-year-old girl, intending that she should marry him. This escapade earned Wakefield a three-year jail sentence and gave him the leisure to theorise.¹⁷

The basic principle of systematic colonisation was that land would be sold at a ‘sufficient price’. The colonising organisation would get land very cheaply and sell it to colonists at a high price. Every purchaser of a land order would get a town, suburban, and rural section, with the latter supplying an agricultural export economy. By means of the sufficient price, landowning would be initially restricted to those with money and therefore presumably culture. Landowners would have the means to employ labourers, whose passages would be subsidised by land sales; labourers would have the incentive of becoming small freeholders after some years’ wage work. Land sales would also fund institutions of education and religion, and public works.

To give effect to his theories, Wakefield promoted the New Zealand Association in 1837, which became the New Zealand Company two years later. The Company organised the colonisation of Wellington and Nelson in 1839–42. Neither settlement worked as planned. The Company’s hasty land ‘purchases’ from Maori meant both that the settlers’ titles were indefensible and that the land was far too rugged for the concentrated agricultural settlements which Wakefield’s imagination had so vividly described. Nor were there markets for large-scale agricultural production. The Company was frequently in financial difficulties, and more than once had to be bailed out by the British government. Even so, the theory appealed to many promoters of colonisation. Otago and Canterbury were both organised by associations linked with religious bodies: the Free Church of Scotland and the Church of England, respectively. It was not this, however, that ensured their relative success, but the fact that suitable land was secured in advance of colonisation. If the Otago purchase of 1844 was relatively unblemished in initial execution, Kemp’s purchase of 1848 represented an effective denial by the Crown of any extensive tribal right in the lands.¹⁸

Kemp’s deed purported to transfer to the Crown, for £2000, an area of some 20 million acres, from Cape Foulwind and Piopiotahi (Milford Sound) on the West Coast, to Kaiapoi and Tokata (the Nuggets), just north of the Clutha mouth, on the East Coast. Later, Ngai Tahu would insist that they had only intended to sell the coastal strip. There were complaints that Kemp had intimidated Ngai Tahu chiefs into signing, and incontrovertible evidence of promises that large areas, for both cultivation and mahinga kai (that is, hunting and fishing), would be returned to Ngai Tahu. Instead, Ngai Tahu were confined to reserves which amounted to ten acres per head. As Walter Mantell, who laid out these reserves, noted in 1851, he had insisted on such a figure ‘in the belief that the ownership of such an amount of land, though ample for their support, would not enable the Natives, in the capacity of large landed proprietors, to continue to live in their old barbarism on the rents of an uselessly extensive domain’. More bluntly, he later admitted that the idea was to provide enough land ‘to furnish a bare subsistence by their own labour’.¹⁹ Ngai Tahu protests began almost immediately. On 22 October 1849 the Moeraki chief Matiaha Tiramorehu wrote to E. J. Eyre, the Lieutenant Governor, complaining of Mantell’s allocations:

These are my reasons for writing to request of you that the boundaries of Moeraki may be extended, that we may have plenty of land to cultivate wheat and potatoes, also land where our pigs, cattle, and sheep can run at large; it will not be long before we purchase both cattle and sheep, and what land have we now in the small pieces which are reserved by Mantell for us fit for such a purpose; each allotment which Mantell has set aside for the Maoris is about as large as one white man’s residence. We are conjecturing who could have given Mantell his instructions so to act; do you, Governor Eyre, think that I should tell him to reserve for the multitude a piece of land only large enough for one man? No; moreover the Natives will never consent to it. There are many people, and but a small quantity of land for them…. The white man’s transactions are bad, -there are in consequence great disturbances already amongst the Natives of this Island; therefore I earnestly request that some person may be sent here directly to alter all the boundaries, Moeraki included; that there may be a large block reserved for us, is the constant topic of our conversation. Extend the boundaries at Moeraki.²⁰

The Moeraki reserve was 500 acres for 87 people. Tiramorehu’s reference to ‘one white man’s residence’ was to the allocation of 2560 acres to John Jones at Waikouaiti, an area allowed to him by the Crown in consideration of his earlier payments to Ngai Tahu.

There had been significant contact between European whalers and the Otago Ngai Tahu communities from the 1830s. Some of the whalers settled at Otakou, Waikouaiti and Moeraki from the middle of the decade, often leasing land from Ngai Tahu and sealing the bargain with marriage into the tribal community. Before 1840 Canterbury was less favoured for European activity, although from the mid 1830s the Banks Peninsula bays supported small whaling and farming communities, notably the French enclave at Akaroa, and a few larger operations were established after 1840 in the Peninsula bays and on the plains. Likewise, John Jones was running stock in east Otago from the early 1840s. In both parts of the island the Ngai Tahu settlements did a brisk trade in pork, fish and potatoes with whalers and passing ships, and the newcomers’ communities remained fragmented, dispersed and isolated until organised settlement began at the end of the 1840s.

The New Zealand Company prescription had emphasised large-scale agricultural farming, which was not only vulnerable to shortages of labour, but also depended upon overseas markets, which were by no means guaranteed. More efficient small-holders supplied most of the grain, potatoes, and dairy produce demanded within New Zealand and gold-rush Australia. Sheepfarming, with an increasing and guaranteed British market, was the obvious alternative to cultivation. This had been foreseen. In 1844 a party of officials traversed much of the eastern South Island in search of a suitable site for the planned New Edinburgh settlement. David Monro, a Nelson landowner who accompanied them, had written that

the resources of Port Cooper [i.e. Canterbury] will best be developed by persons of considerable capital – each having a range of a good many thousand acres and thus being able to combine the rearing of stock with tillage. Such persons should be able to wait for a time for their profits.²¹

James Edward Fitzgerald, who was to be first Superintendent of Canterbury, echoed Monro:

the only way to make money here is by sheep farming. Money may be literally coined in that trade. And it is eminently the profession of a gentleman. The sheepfarmer may have his comfortable house and gardens and a little farm producing all he requires, but his personal task is to ride about the country inspecting his vast flocks and giving directions for their management.²²

Once this became generally realised, sheepfarming expanded rapidly in Canterbury.²³ By the end of the 1850s it was being extended from the plains and into the hill country, and by 1864 nearly six million acres were under pastoral licence. Agricultural farming remained close to Christchurch, spreading out ‘along the margins of the swamps of Ellesmere’ after 1860, but until the 1870s ‘Canterbury remained a vast sheep-walk tempered by what could be called an agricultural fringe.’²⁴ This agricultural fringe, which extended along the coast from Rangiora and Kaiapoi to Geraldine, depended in many places on swamp drainage, undertaken in most areas after 1860. While some fortunes were made in this way, it was one of the more graphic examples of the dispossession of Ngai Tahu, whose rights to the produce of the swamps had formed a crucial part of the guarantee of mahinga kai in Kemp’s Deed.²⁵

In Otago, the arrival of the Free Church settlers in 1848 had led to a small agricultural settlement inside the Otago Block, with pastoralism spreading gradually into the interior. Sheep runs were established around Moeraki and North Otago in the early 1850s, in the Waitaki Valley in 1855, and in Central Otago by 1861. The Otago Scheme and Association had been strongly opposed to squatting, wishing to confine pastoral rights to those who had paid for land in the Otago Block. The Otago authorities thus favoured a high price for land, which they saw as deterring aggregation and ‘speculation’. At the same time there was a tension between the desire for small agricultural settlement and the