THE ECONOMICS OF THE STATION 233 



more ; the only real values passing between them being 

 hypothetical possessions.* 



To recover the advances, a system of jobbing in 

 stations grew up and was stimulated by the banks. 

 Under the operation of this system many stations thus 

 formed or thus aided passed into the hands of the banks 

 or the merchants, even while they remained in the hands 

 of their nominal owners. Consider for a moment what 

 this necessarily implied. The merchant to whom a 

 squatter was indebted held a preferential lien on his 

 wool or a mortgage on his live stock. Before the squatter 

 could call an ounce of the wool on the sheep's backs his 

 own, his liabilities to the banker or merchant had to be 

 met. He could not bargain for its sale. He must send 

 it to London in ships chosen by the mortgagee. Bills of 

 lading must be endorsed by the mortgagee, and this was 

 done at a cost of 2| per cent. He must accept supplies 

 from the merchant, and at the merchant's prices. A 

 chain of monopolies bound him hand and foot.t 



The gains of the pastoralist were affected by a variety 

 of circumstances. The profits of the first year were 

 swallowed up by expenses. Then a financial panic in 

 London might send down the values of stock or the 

 price of wool with a mighty and disastrous fall. Wages 

 were high and discount was at war-rates. Three-fourths 

 of the squatters had hazarded their all in buying stock 

 and acquiring stations. Loaded with debt and unable 

 to meet their liabilities, they sank into despair. A 

 drought might ensue, when the sheep and cattle died in 

 thousands. Absolute ruin seemed imminent. Large 

 business-firms became insolvent or passed through the 

 bankruptcy court. The banks themselves were pushed. 

 Such was the state of things in 1838-9 and in 1843-8. J 



Embarrassed themselves, the banks put pressure on 

 their chents. These were informed that the bank must 

 close all pastoral accounts under a certain amount. It 



* Ranken, Bush Essays, pp. 13-4. 

 f Beodkibb, Experiences. 

 X Lang, Account, ii. 187. 



