Auckland Business and Businessmen in the 1880s

Abstract

The city of Auckland in 1885 was free from the depression which had troubled the greater part of the colony of New Zealand since the early years of the decade. There had been a buoyant economic atmosphere for some time. The main local bodies of the city were carrying out an expansionist public works programme. Many new public companies had been formed in recent years. The city and suburbs were visibly growing as the building of houses, shops and commercial blocks went on at a rapid tempo.

By early 1886, however, the prosperity had gone. Auckland passed into as harsh a decade as any experienced in the one hundred and thirty years of its European existence. Bankruptcies multiplied and were found in high and unexpected places. Firms imagined to be of unquestioned solidity fell. Large local companies were forced to liquidate: there was usually little left over for division among shareholders who had taken up holdings in more confident days. Thousands of properties fell into the hands of mortgagees.

Few were aware of how serious and general was the business collapse until October 1888 when a shareholders’ committee of the Bank of New Zealand presented an alarming report. It disclosed that the heavy losses of the Bank were relatively far worse in Auckland than elsewhere and went on to censure much of the business carried on in the city and province. Since the Bank of New Zealand had long been regarded as an Auckland institution and its board invariably drawn from prominent businessmen of the city, this report reflected adversely upon the existing commercial practices, and the leadership of the city. But if there were ‘guilty men’ as the report suggested, they were never brought to trial, nor were their names revealed except in the vaguest terms. The Banking Committee set up by the House of Representatives in 1896, failed to persuade Bank directors to name either the weak accounts, or the inadequate securities that the Bank had accepted in Auckland and the Waikato. Bank spokesmen were as tight-lipped as any private banker in Zurich. The facts were not revealed nor have been since. Yet the charges made in 1888 have generally stuck. It has been believed that influential Aucklanders did much to keep their city in a state of artificial prosperity.

This thesis grew out of intermittent research into Auckland’s economic development in the 1880s that I began in 1956. Since 1964 I have more seriously and continuously studied the businessmen of the decade. I soon found explanations of the boom and collapse invariably moralistic and generally unsatisfactory. Rarely did demonological trappings fit the businessmen when studied in detail. I became convinced that the sudden growth of the city and the related economic expansion were primarily economic phenomena that had primarily economic explanations.

Where I have been able I have turned in my research to business records. The Sir John Logan Campbell Papers at the Auckland Institute Library were extremely valuable. But records of firms were all too few. I relied most heavily on quite unspectacular documents: the daily press, and the records of the land registries in Auckland and Hamilton and the companies’ office in Auckland. Newspapers reported company business very fully in those days. The press invariably carried prospectuses, and had detailed accounts of company meetings. Annual reports, financial statements and shareholders’ discussions at an important company meeting might run into thousands of words. Bankruptcy proceedings, and civil actions in court, moreover, were given far more detailed press coverage than today and tell us much about how the less successful and more litigious conducted their affairs.

Lands and deeds records I found exceptionally valuable. With some persistence and a little luck one can reconstruct much of the borrowing of the men whose names the Bank of New Zealand refused to reveal, and other businessmen as well. The key was usually a legal description of one piece of land of the person concerned often to be gained from the General Assembly electoral rolls. Deeds and memoranda of mortgage and transfer I found very rewarding. An unexpected bonus from Certificate of Title Register Books were maps that gave the means of establishing the dimensions of estates that usually described in very general and often erroneous terms.

The virtually unused company records stored in the National Archives Record Centre at Auckland proved to be a mine of information. Records of the old law firms and banks where available proved very valuable but the position of professional trust in which the lawyer and the banker stand in relation to clients’ records must inevitably limit the opportunities of the historian to participate.