Business and Pastoral
For three-quarters of a century, at least, the prosperity of South Australia rested largely on the wealth derived from its flocks and herds and its mines. (On Elder, Smith & Co)
A Family Business
The Elder family business began in Scotland as ships chandlers and achieved prosperity through outfitting privateers in the Napoleonic wars. In 1939 Thomas Elder’s father, George, decided to expand the family enterprise into the ‘new world’. They would have heard of the potential prospects through their good friends, the Smillies of nearby Leith. Matthew Smillie had settled on 5,000 acres at Nairne and his son William was Immigration Agent for the colony.
The second Elder son, Alexander, at the age of 24, set off for the new Colony in his father’s sailing ship The Minerva, with a cargo of goods to sell - including alcohol, food, gunpowder, seeds and agricultural machinery – to establish his own business ‘A.L. Elder & Co’ The Colony at the time was not doing well: dozens of business had failed from economic depression. Alexander however opened an office as agent and trader, and employed the Minerva in ferrying goods between the Australian colonies, at one time returning the explorer Edward John Eyre back from Swan River in Western Australia. He thrived in the improving economy, purchasing 20,000 acres of land at Mt Remarkable with F.H. Dutton and registering his own stock.
Another brother, William, also came to Adelaide in 1840 as captain of the ‘William Nichol’ with 190 Irish and Scottish migrants. After a voyage to the Philippines, William returned with his wife Anne in the barque ‘Symmetry’ and a cargo of two steam engines, one destined for the Nairne Flour Mill. A third brother, George, followed to join the business.
A.L. Elder & Co. prospered as traders, pastoralists and brokers in the profitable Kapunda copper discoveries, and expanded into the transport and shipping of wool and copper. Alexander succeeded in gaining the agency for the P&O England-Australia service and developed Largs Bay as an anchorage and for loading, naming it after his native Largs in Scotland. He became a Justice of the Peace, a trustee of the new Savings Bank, and was elected in 1851 to the Legislative Council of the first Parliament. George was Chairman was the driving force behind the building of the Port Adelaide to Adelaide railway
The Elder brothers did much to advance the province and had established a thriving business, but it was the youngest brother Thomas who was destined to achieve the greatest success of them all. Alexander, his wife, and three children returned to London in 1853 where he established an agency for Elders. Thomas, then aged 36, arrived in Adelaide in 1854 to fill Alexander’s place, travelling on The Queen of the South with his friend and future partner and brother in law, Robert Barr Smith. By 1856 William and George had also returned to Scotland to live in great houses financed through their successful Adelaide ventures.
Robert Barr Smith
Robert Barr Smith, the university educated son of a radical Free Church minister, had established his own business, R.B. Smith & Co, in Scotland in 1848. Robert’s business partner had been married to Jemima Elder and Robert had been introduced to Thomas Elder and his young sister Joanna, later to become Robert’s wife. Robert had established a business with Andrew Hamilton who went out to Melbourne in 1852. Becoming alarmed at the state of the business, Robert sailed out to Australia in 1854 on the Queen of the South with Thomas Elder, fully intending to return and asking Joanna to marry him before he left.
Thomas (known more familiarly as Tom) persuaded him to join the firm of Elder & Co. as business partner in place of his brothers, assuring Robert that Joanna would come out to the colony to marry him.
Elder, Stirling & Co
On the departure of his brothers, Thomas had partnered with the pastoralist Edward Stirling and his brother-in-law John Taylor in the new enterprise of Elder, Stirling & Co.
In 1857 he travelled up the River Murray by paddle-steamer for several months. Inspired by the country’s potential, he impetuously bought large tracts of land. Confident he was leaving the business in good hands, he then departed for a trip back to the home country, leisurely travelled through Egypt and the Holy Land on the way. However, Stirling and Taylor became nervous about the potential liabilities from Thomas’ land purchases and attempted to resign. A clever move by Robert saw them withdraw their resignations, and in 1860 he also travelled to England with Joanna to meet with Thomas and sort the matter out.
Stirling and Taylor left the company, compensated with £32,539 and a year’s profits, and the brothers-in-law reconstituted the business as Elder, Smith & Co., a partnership which would successfully continue for the next 25 years.
It was the beginning of a remarkably successful and profitable partnership –Thomas was imaginative, dynamic and entrepreneurial, while Robert was the “guiding genius” with “the sagacity of the financier and the ripe judgement of the statesman.”
In 1859, Elder, Stirling & Co had invested in William Watson Hughes’ copper mines at Wallaroo. After the initial discovery, costly exploration work needed to be done before the rich lodes were reached. Elder, Smith & Co. accepted liabilities of around £80,000 before the Wallaroo Mining and Smelting Company became profitable. The associated Hunter River Copper Works at Newcastle also proved profitable.
The risky venture resulted in enormous wealth for the partners and the Colony. Copper discoveries at Moonta in 1861 also proved tremendously successful, exceeded the wealth of Wallaroo, and allowing the Company to expand its interests far and wide.
This firm was instrumental, by making very large advances of capital, in founding the Wallaroo and Moonta mines and the Wallaroo Smelting Works. The mines now conjointly produce about £500,000 worth of copper per year, or one-seventh of the total exports of the colony. This was the proportion last year, when mining was at a low ebb, but in favourable years the proportion has risen to a third or a quarter of the whole. These mines are estimated to support directly and indirectly 20,000 persons.
Australasian Sketcher with Pen and Pencil (Melbourne), 6 July 1878, page 55
Years later Robert described the early years in a letter to George Elder: "So far as Tom Elder & I were concerned whilst the Wallaroo & Moonta brought us profit it also added to the burden of our finances. In fact, we could not have carried on these mines but for the large credits in the sheep farmers' accounts ..." (Robert and Joanna, p. 20)
Elder and Barr Smith invested their new wealth in extending the firms interests and buying, settling and stocking land on a vast scale and extending into Queensland and Western Australia. Between them they eventually owned land described as equalling the size of Scotland.
Land outside the surveyed boundaries of the state was established by squatters. By 1847, the increasing importance of the pastoral industry to the state led to pastoralists being granted short term leases over land not yet surveyed for agriculture. By the end of the 1850s wool production was equal to wheat for export value, and squatters occupied 24,000 square miles at an average rental of a farthing an acre.
Elder encouraged exploration and was keen to exploit newly discovered regions and expand the firm’s pastoral interests into the interior. However, the opening up of outback regions on a vast scale was a risky business, plagued by disease, bush fires, rabbits, dingoes and worse of all drought. Wool also had to be shipped large distances by horse or bullock wagons to railway terminals before shipping.
The Company’s vast wealth supported large and long-term investment which would prove economical in the long term, becoming one of the world's largest wool-sellers. They appointed professional managers and spent tens of thousands of pounds on fencing hundreds of miles of their runs and turning the sheep loose in huge paddocks – foregoing the need for shepherds. They dug dams and sunk artesian wells to droughtproof the land, importing machinery such as steam scoops to excavate dams deeper than could be done with bullocks and men. Their range of properties was so large they could transfer thousands of sheep from one area to another to manage drought.
The firm also spread the financial burden by establishing companies with multiple shareholders, including many Elder family members.
Thomas Elder's holdings included:
- 1862 Lake Hope and Blanchwater leases and the Beltana run (2331 km²)
- 1864 an additional three pastoral leases at Lake Hope (160 km²) and purchased Umberatana
- with Peter Waite Elder took up Paratoo (7770 km²), and Pandappa stations and later extended their holdings even further, including Manuwalkaninna station
- 1867 additional leases in the Beltana area as well as others in the far north, including Mount Partridge, Mount Rose and Winnowie
- 1868 more leases including the Lake Arthur run (885 km²)
- 1869 Mount Lyndhurs
- 1870 good rain led to more country taken up, including Finniss Springs
- 1873 leased Wallerberdina
- 1886 Milo and Welford Downs Pastoral Co.
In 1866 Elder gained the mail contract between Blanchewater and Lake Hope for £150 per annum. During 1873 Elder’s station Blanchewater supplied light horses for repeater stations along the Overland Telegraph Line. Elder’s stations Beltana and Umberatana also bred camels and acted as suppliers for explorers.
“Although he has never himself led a bush life for any length of time, he has spent his money freely in assisting the genuine pioneers of settlement. The course he has followed in this matter has been pecuniarily a profitable one, but none the less he is deserving of praise for his enterprise and liberality.”
Evening Journal 13 May 1878, page 2
Elders Wool & Produce Co.
In 1882 Tom and Robert established Elders Wool & Produce Co. Ltd in order to acquire the auction portion of the wool and produce business of their own original firm. After 6 years this company merged with the parent company and re-emerged as Elder Smith & Co. Ltd., with a board of directors replacing Tom and Robert as individual managers
The company was sufficiently stable to endure the depression of the 1890s. In succeeding good years wool production greatly expanded and the firm shared richly in this
Robert had to go to England in 1883 to organise a replacement for Alexander’s agency, resigning as chairman and being replaced by Peter Waite, one of the original board members
Thomas’s father George Elder was an important figure in the Scottish shipping industry and owned a fleet of sailing ships. Elder, Smith & Co. Elder, Smith & Co. developed an impressive shipping fleet of their own, with other ships such as the ‘Kadina’ owned jointly with Henry Simpson.
One of the company’s most famous ships was the ‘Torrens’. A full rigged passenger clipper named after the author of the land titles system, Sir Robert Torrens. Built in Sunderland, Scotland, for the Australian trade, in 1870 it sailed from Plymouth to Adelaide in 64 days - a record that has never been beaten by a sailing ship.
The novelist, Joseph Conrad, served as first mate on the ‘Torrens’ from 1891 until 1893, and the ship is referenced in his novel Chance. On Conrad’s last voyage he met the fellow novelist, John Galsworthy, and they became life-long friends.
Thomas Elder and Robert Barr Smith were also founding directors of the Adelaide Steamship Company in 1875.
Peter Waite also hailed from Kirkaldy and was well known to the Elders. He came to South Australia at the age of 25 and joined his brother James, who held Pandappa Station near Terowie in conjunction with Elder and Barr Smith. Peter later took over Pandappa when his brother died.
In 1862 Waite purchased Paratoo with Elder and Barr Smith, and in later years developed a property portfolio of equal acreage. Thomas Elder joined with Waite in a number of properties
Waite’s name is inseparably linked with improvements and innovations in pastoral development. Unlike Elder or Robert Barr Smith, he spent many years in the dry north and experienced first-hand the problems of occupying vast semi-arid areas.
He practiced long-range station management, and spent hundreds of thousands of pounds on improvements such as sinking wells and constructing dams in order to survive droughts. He also saw the advantages of fencing of runs so paddocks could be spelled. Between 1871 and 1872 he imported some 265 tons of fencing wire from England.
Waite also practiced conservative stocking, made great use of donkeys and camels, and bred high class flocks of merino sheep.
After Elder’s death in 1897 Waite became the Managing Director of the reformed Beltana Pastoral Co. Ltd and the Mutooroo Pastoral Co. Ltd. The Mutooroo Station near Broken Hill was managed by Andrew Smith, the father of aviators Ross and Keith Smith.
On his death Waite maintained ‘the Scottish tradition for philanthropy established by Elder and Barr Smith in the gift of his Urrbrae estate to the Government and the University of Adelaide for an Agricultural Research Institute and School.