Insolvency in colonial Queensland

This post deals with John Douglas's insolvency in Queensland in 1872. It also explores the wide shame felt by those going bankrupt in colonial Australia.

1872 was a traumatic year for Douglas financially.  Successful in public life, he never evidenced anywhere near the same level of success in business affairs.  He had come out to Australia in 1851 as a wealthy young man but, despite investing in property, had been unable to capitalise on the inherent financial benefits routinely available to those born into a privileged class.  As Bernays perceptively remarked, “The only million John Douglas ever saw was in a bad dream after a late sitting of the House.”[1]

In 1868, Douglas was forced to sell his pastoral run, Tooloombah, due to high interest rates and depressed property values caused by the 1866 recession.  Despite this sale, he was unable to clear the outstanding debt and with it attracting a high rate of interest, it was financially ruinous.  As agent-general in London, Douglas could service the debt repayments because he drew the considerable salary of £1,000 per annum.  However, on returning to Queensland effectively unemployed, he experienced severe financial difficulties and, when forced to apply for insolvency, was adjudged an insolvent by the Supreme Court.[2]  Douglas, whose occupation was listed in the insolvency papers as a “gentleman,” had been left with no other choice, because he was saddled with a debt of more than £6,500, an impossible amount for him to pay off.[3] 

For a man of Douglas’s standing and position in society, insolvency was a heavy blow and resulted in severe embarrassment and shame.  While colonial society witnessed frequent bankruptcies and cases of economic hardship, individual cases were believed to be the result of psychological or moral ‘flaws’ in the bankrupt.[4]  For a contemporaneous account of this stigma, this pitiful diary entry by a Victorian farmer’s wife, Annie Dawbin, on her husband’s insolvency while residing in Victoria in August 1861 is instructive:

I kept on thinking of my poor husband’s thin face and haggard look, and am so very sorry for his losses!  I only trust we may be able to weather the storm, and pay all their dues, and if we have but a few pounds to begin with, we shall be free from debt; which is the greatest blessing.  I am sure I don’t know what we shall do, but I hope we may leave this colony, and go somewhere where nobody will know us.[5]

Nonetheless, Douglas’s friends and family must have rallied around him, for he continued to live in his Wickham Terrace home, and, despite having no known income, maintained his involvement in the social and communal life of Brisbane.[6] 

The question needs to be asked why Douglas was not a financial success.  Why did he not take advantage of the financial opportunities that must have come his way and which many of his parliamentary colleagues availed themselves?[7]  Why was he not financially astute?  It seems that there were two reasons.  Firstly, money, and the making of it, was not a major concern of his.  He invested in pastoral properties because he wanted to live on the frontier, not because he wished to make money out of them.  Douglas was a dreamer and an idealist.  He devoted his time and energies to helping people and society rather than amassing riches.  As he later told his son Edward:

I was never taught the value of money.  Not that it is necessarily a good thing to be rich, but it is good to cultivate habits of strict economy.[8]

To Douglas, duty, service and church came ahead of Mammon.  Spencer Browne, who knew him well, wrote this epithet of Douglas following his death:

“It always seems to me a great tribute to a political leader in a young country that his friends should be able to say; ‘he died a poor man!’”[9]

Douglas’s attitude to money was atypical for the period.  As Fitzgerald remarked of the young colony’s inhabitants, they were uniformly wedded to “above all, materialist values and an untiring quest for prosperity.”[10]  Moreover, when Douglas did have money, he generously gave it away or spent it on those less fortunate.[11]  As his second wife, Sarah, lamented to Edward, “he is very careless in money matters and could fritter away anything he can lay his hands on.”[12]

Douglas’s strong religious beliefs and involvement in the Church helped sustain him during this dark period of his life.  By 1872, he had been elected to the newly formed All Saints’ Church Parochial Council, and actively assisted in experimental services at Petrie Terrace.[13]  A devout Christian, the Church was his solace in both good times and bad, giving him the strength and courage to fight and survive adversity and dishonour.

As previously discussed, 1872 was also the year that Douglas petitioned the Queensland Parliament for a select committee into his role as agent-general for emigration.  Its report, handed down on 30 July 1872, largely exonerated him, and allowed him to put this traumatic period in his life behind him.  However, Douglas had to wear the odium of his insolvency being aired in parliament when Palmer tactlessly remarked of Douglas:

He never yet knew a man of whose talents for business the Assembly had such a poor opinion.[14]

Douglas’s allies in the assembly sprung to his defence, with William Henry Groom, the member for Drayton and Toowoomba, noting that Douglas:

… was not the first gentleman who had figured in the Insolvency Court, for even in the House of Lords, many members had taken refuge in that court under circumstances far less honorable.[15]

Another member of the opposition, Thomas Blackett Stephens of South Brisbane, felt that “a grosser insult ...  could not have been offered than to drag into the question the matter of Mr. Douglas’s insolvency.”[16]

This exchange demonstrated the personal nature of politics in Queensland at this time.  While supposedly gentlemen who abided by the rules and went to great lengths to ensure a modicum of civility to each other, the urge for parliamentarians to attack their opponents was too great a temptation to resist whenever the opportunity presented.  Fortunately, for Douglas, his allies in parliament came to his defence, and defended his reputation and honour in an age when honour and reputation meant a lot more than it does today.[17]  This parliamentary exchange also demonstrated that, despite his financial difficulties, Douglas could continue to count on the support of friends and colleagues.

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[1] Bernays, p. 41

[2] Queensland Government Gazette, vol 13 no 26, 9 March 1872;  “Estate of John Douglas.”  Queensland State Archives, SCT/CB 90, File no 310 of 1872; Brisbane Courier, 23 April 1872, p. 2.  A certificate of discharge was granted to Douglas on 22 April 1872, with the matter finalised on 28 May 1873.  Three allotments of land owned by Douglas at Broadsound, valued at £20, a portion of land at Bowen valued at £100, as well as £86, one shilling and three pence, being the proceeds of the sale of his books and ornaments, were returned to him.

[3] “Estate of John Douglas.”  Queensland State Archives, SCT/CB 90, File no 310 of 1872.  On the Insolvents Balance Sheet, Douglas listed a debt of £6,767, 15 shillings and nine pence owed to Gilchrist, Watt and Co., who had financed the mortgage to Tooloombah.  His assets were listed as land valued at £100 and “a few books and ornaments; value about £20.”

[4] Fitzgerald, p. 317

[5] Lucy Frost, ed.  The Journal of Annie Baxter Dawbin: July 1858-May 1868.  Brisbane, University of Queensland Press, 1998, p. 226

[6] For instance, Douglas was reappointed vice president of the Caledonian Society in 1872.  (Brisbane Courier, 26 April 1872, p. 2)

[7] For example, in 1896/7, the Queensland National Bank could boast as shareholders eleven members of the Queensland legislative council and seven members of the assembly.  (Fitzgerald, p. 311)

[8] John Douglas to Edward Douglas, 22 May 1897.  Douglas Papers, John Oxley Library, State Library of Queensland, OM 89-3/B/2(2)/16

[9] Browne, p. 73

[10] Fitzgerald, p. 308

[11] During a 12 month period (1899-1900) when living on Thursday Island, and despite being chronically short of money, Douglas donated the following sums of money; three guineas to the “Patriotic Fund;” two guineas to the Torres Straits Rifle Club prize fund and the same amount for the highest scorer; offered £10 to cope with plague on the island, and £5 to award as prizes for the best gardens on Darnley Island.  (Torres Strait Pilot and New Guinea Gazette, 18 November 1899, p. 2; 17 February 1900, p. 2; 5 May 1900, p. 2; 10 November 1900, p. 2 and 17 November 1900, p. 2)

[12] Sarah Douglas to Edward Douglas, 2 August 1897.  Douglas Papers, John Oxley Library, State Library of Queensland, OM 89-3/B/2(2)/11

[13] Kissick, p. 52.  These services were designed for the “large poor population,” behind Petrie Terrace and on Paddington Heights in Brisbane, who found it too far to travel to the All Saints’ Church in Wickham Terrace.

[14] Colonial Secretary.  “Petition.  (Mr. John Douglas.)”  Queensland Parliamentary Debates, 1872, p. 889

[15] Mr. Groom.  “Petition.  (Mr. John Douglas.)”  Queensland Parliamentary Debates, 1872, p. 890. 

[16] Mr. Stephens.  “Petition.  (Mr. John Douglas.)”  Queensland Parliamentary Debates, 1872, p. 890.  Palmer was forced to deny that his remarks referred specifically to Douglas’s insolvency.  “Petition.  (Mr. John Douglas.)”  Queensland Parliamentary Debates, 1872, p. 890)

[17] Mr. Groom.  “Petition.  (Mr. John Douglas.)”  Queensland Parliamentary Debates, 1872, p. 890