Chapter IX: Comparison of Cattle and Sheep Stations

The whole of the coast country of Queensland is unsuited for sheep, chiefly owing to the prevalence of grass-seed, but it fattens cattle admirably, and it is along the coast-range that most of the cattle-stations in the Colony are situated. Grass-seed is an abomination which appears in autumn in all the grass on the coast. It forms in bundles of hundreds of seeds, each of which is a hard, black, little weapon, about a third of an inch long, with a sharp barbed point at the business end. When ripe, they shake off the instant anything touches them, and attach themselves to it, and, the point being as fine as a needle, they work their way into any soft substance in a marvellous way, the barb preventing them from ever going backwards. Anyone walking or riding through the long grass in seed-time is certain to get his clothes full of them, and the sharp pricks from their points are most irritating. Life for a sheep in such a country is an impossibility. Their wool becomes so full of seeds that it is perfectly worthless, and eventually the seeds work their way right into the flesh of the sheep, and, of course, when they reach the vital organs, destroy its life. I have seen the unfortunate wretches with their fleeces stuffed so full of grass-seed that they are absolutely incapable of moving, and can only stand still, with their legs wide apart, looking more like a hedgehog on stilts than a sheep. Of course, grass-seed does not affect cattle, which do very well on the coast runs. But it is a remarkable thing that, although they lay on just as much fat upon the coast-country as they do upon the western downs, they will not travel without losing it. Cattle fattened upon the salt-bush and grasses of the west will, if driven carefully, carry their condition for hundreds of miles; but the fat that they acquire on the coast-grass, and especially below the range, runs off them like melting butter when they travel.

Cattle-growing is not nearly so profitable as sheep, but, on the other hand, it requires far less capital to start with, and is attended with much less risk. The vast difference between a cattle-station and a sheep-station is this, that whereas the former can be made to pay its own way from the first, the latter requires a heavy outlay before it can be safely stocked at all.

Of course, in proportion as a man lays out money in improving a cattle-station at the first start, so his returns will be quicker, heavier, and more certain. But, if he is unable to do so, he will find that the expenses absolutely necessary to keep the place going are by no means heavy. We will suppose that a squatter puts 5000 head of cattle on to a piece of entirely unimproved country. He ought to get the cattle, and sufficient country to carry 10,000 head, for £20,000. For about £400 he can put up yards, and a weaning-paddock for working the cattle, horseyard, and paddock, and comfortable houses for himself and his men. Another £150 will start him with sufficient horses, and, if he is at all inclined to work himself, two stockmen and a black boy will be quite enough hands to work the cattle. The wages of the two former, at £75 a year, and the black boy at 10s. a week, come to £176 per year, and another £100 a year ought to find them all in rations.

We will suppose that the increase is allowed to accumulate, nothing but fat cattle being sold off the run for the first five years.

During that time the proceeds from sales of fat cattle should be amply sufficient to cover all working expenses, and to enable the squatter to keep on improving his run by fencing, etc., to meet the increasing requirements of his herd.

At the end of five years he should have at least 10,000 head of cattle, and have completed all the improvements necessary for working them.

Allowing a liberal percentage for deaths, his annual increase from 10,000 head would be fully 2500, of which about 800 would be fat cattle.

Supposing him, for the future, to keep his herd at 10,000, and sell the whole of his annual increase, his yearly profits would be as follows:--

By sale of 800 fat cattle, at £4 £3200
” 1700 store cattle, at £1:10s. 2550
-----
£5750
=====
To working expenses £1700
” Balance 4050
-----
£5750
=====

In the above calculation the price of fat cattle is taken at the average price in Queensland for some years past, and the price of store cattle at the lowest possible figure, which is called “boiling-down” price; for when store cattle are perfectly unsaleable, as they sometimes are, it is always possible to clear £1:10s. a head on them by boiling them down for tallow and hides.

The working expenses have been put rather high, and the increase below the average of fair seasons.

Thus, in five years the squatter’s original capital of £20,000 will have increased to £40,000, for which he will get a return of £4000.

Of course, in good times, when fat cattle are up to £5 or £6, and store cattle to £2:10s., his profits will be very much larger, but, at the same time, a squatter must always be prepared to spend a large sum of money upon the purchase of land, to secure his run against selectors. No allowance has been made for this in the above calculations, for legislation on the land question is continually assuming different phases, but a squatter may take it for granted that, sooner or later, he will have to lay out a great deal of money in securing his run, and he is generally quite willing to do so when the time comes.

The risks attending the working of a cattle-station are the possibility of an epidemic of pleura-pneumonia breaking out in the herd, and, of course, the danger of a very severe drought. But the coast country, to which cattle are chiefly confined, is, as has been already said, not nearly so liable to drought as the interior, where sheep-farming is carried on; and although isolated cases of pleuro-pneumonia are nearly always to be met with in a big herd, it is extremely seldom that the disease assumes an epidemic form. On the whole, therefore, the risks of growing cattle may be considered as being very small. The disadvantages of a cattle-station from a business point of view are, that, in the first place, although it will return a high and safe rate of interest if properly managed, still it will never afford a chance of making the rapid fortune that four or five consecutive good seasons on a sheep-station ensure. In the second place, a cattle-station requires very few hands, and not much capital to work it, and opens no connection with the banks and the business men in the towns. No one cares the least for the connection with a cattle-station, for it is worth nothing. The cattle are raised at a small expense, driven down to market by the station hands, sold to the butchers, and there is an end to them.

It is very often greatly to the interest of a squatter to be able to raise money on the security of his run, either to tide over bad times, to make improvements, or to secure his country by the purchase of freehold land. The indifference of the banks and of business men generally to the cattle industry makes it very much more difficult to raise money upon a cattle-station than upon a sheep-station. With the latter there is not the slightest difficulty. Wool is the staple product of the country, and represents an enormous proportion of the aggregate wealth of the community, and the bulk of the population are either directly or indirectly connected with its growth. Consequently “financing” is rendered very much easier upon the security of a sheep-station; and if a man puts £20,000 of his own money into forming a sheep-station, if he knows anything at all of finance, he will easily get £40,000 of someone else’s money to help him, at a rate of interest that will pay him remarkably well. All over the country a bale of wool is nearly as good security as the banknote that represents its value; and it is no matter if a man’s wool be in his woolshed in the centre of Australia, under a tarpauling on the banks of a flooded creek, or in a vessel coming down the coast, he can always get an advance upon it from the bank.

Sheep-farming in Australia is now a very different thing to what it was twenty or even ten years ago. In those days a man had nothing to do but to go far enough into the interior, and he could take up as much new country as he pleased, paying nothing for it beyond the annual rent to the Crown. He put his sheep on to it, and in a few years, if he had good seasons, he made an enormous fortune, partly from his annual profits, but chiefly from the extraordinary rise in value of his country and stock. But if in the meantime he had two bad seasons, he was probably ruined; for the early settlers did not comprehend the vital importance of laying out capital in storing water upon their runs, to guard against the possibility of a long drought.

Long experience has now shown that every part of Australia that is fit for growing sheep is subject to occasional periods of very severe drought, at uncertain intervals, the occurrence of which it is quite impossible to foretell. Some of these droughts have been of extraordinary duration, and the early settlers were astonished to find that water-holes and creeks which they had been for years accustomed to regard as affording an inexhaustible supply of permanent water, succumbed at length to the severity of one of these visitations, and left their country without a drop of water upon it. Hundreds of men were ruined by trusting to the natural water upon their runs, while others, of course, who were fortunate enough to have a run of good seasons, made tremendous profits.

But the lesson which has been learned is this, that in order to provide against the possibility of a prolonged drought, the squatter must treat his country as if practically there was no natural water upon it at all, and expend a large amount of capital in making dams and tanks, so as to have, if possible, a supply of water stored in every part of his run that is capable of holding out against any drought, however severe. This entails vast expense, but it is the only possible way of making a safe and profitable investment of sheep-farming in Australia. Of course there are some lagoons and water-holes upon which the most prolonged drought has little or no effect, and their existence greatly enhances the value of any piece of country upon which they may happen to be found.

An immense amount of loss was sustained in the early days by overstocking the country, and in some parts the evil effects of so doing are still felt; for to such extremities were the unfortunate sheep reduced in a drought, that they not only ate up every blade of grass, but tore out the roots and ate them as well, so that it took years before any grass would grow there again. It is by no means uncommon in such districts as the Riverina, to be reduced to feeding the sheep upon the leaves of gum-trees to keep them alive during a dry season, when every vestige of grass has disappeared. In most parts of Australia, however, water is the main thing, for, unless the country has been overstocked, sheep will manage to eke out an existence in a most extraordinary way, provided they have a sufficient supply of water. A dozen years ago, if it had been represented to an English capitalist that the safest and most profitable investment that he could possibly find for his money would be to take up dry country in Queensland, and make a permanent supply of water on it, the idea would probably have struck him as eminently fantastic and unpractical. But it is probable that the world has never yet seen so certain and so quick a means of realising an enormous fortune. At that time an unlimited extent of country was to be had for next to nothing, which has since risen to a fabulous value, where money has been expended in storing water upon it.

At the present time, there is not the same amount of money to be made at it as there was in the old days, because every mile of country that is worth anything in Victoria, New South Wales, Queensland, and the greater portion of South Australia and the Northern Territory, has been taken up; so that instead of getting his country for nothing, the squatter has now to start by paying at least £10 a square mile, even in the back-blocks of Queensland, for, say, a twenty-one years’ lease of perfectly bare country, without permanent water, stock, or improvements of any kind.

In Victoria the plundering and blundering of an ignorant Radical legislature has considerably reduced the market value of every acre of pastoral land in the colony. In New South Wales the value of land is about stationary; but in Queensland and South Australia its value is still increasing, though not at the same rate as formerly. The tremendous sums that have lately been paid for sheep-stations in Queensland might at first seem like fancy prices, but the profits subsequently derived forbid the application of any such term. Hitherto most of the large fortunes that have been made in connection with sheep-farming have been made more from the rise in value of the country than from the annual profits derived from the industry itself, though these have been very great.

If we follow the career of the “leviathans” of Australia in the squatting line, we shall see that most of them made their fortunes by constantly taking up new country, stocking it and improving it, and selling it again as soon as possible, at an immense profit. Now, however, this can only be carried out in a very modified form. The value of country, whether dry or watered, stocked or unstocked, all over New South Wales and Queensland, has risen to such a point that, for the future, profit must be expected more from the annual proceeds of working the country than from any great subsequent rise in its value. Of course there are still districts, such as the northern territory of South Australia, and the Gulf of Carpentaria in Queensland, where a considerable rise in the value of bare country may be confidently looked for during the next few years. But in the central and southern districts the country itself may be considered to have attained a value at which it will remain steady for some years, and profits, as I have said, must be derived from increase of stock and sale of wool. What these profits amount to in fair seasons will be seen from the statistics appended below, and it must be acknowledged that they are in themselves sufficiently startling.

The following are the particulars of a station in the Barcoo district of Queensland, consisting of 800 square miles of country, of which only about 600 are available:--

Bought in 1882 for £200,000, with 135,000 sheep. Out of these there
were 62,000 ewes in lamb, from which they got 54,000 lambs the first
year.

Clip of wool 1882 (135,000 sheep), 1730 bales valued at £35,000. Sold
since purchase 30,000 sheep off the run, at £15,000.

In 1883 they shore 190,000 sheep, and including lambs there are now
210,000 sheep on the run. The value of this year’s clip is £48,000,
and the value of the increase is between £30,000 and £40,000.

Taking the expenses at £15,000 per annum, this leaves a nett profit
in two years of at least £113,000, besides which the station has
risen greatly in value.

The following shows the rise in value and returns of another sheep-station in the Aramac district of Queensland. It consists of about 1000 square miles of country, and was bought in June 1881 for £70,000, together with 41,703 sheep and 2230 cattle on the run.

Original number of sheep 41,703
In all to date (Oct. 1883) they have had 77,327 lambs.
And bought 86,014 sheep.
-------
205,044
=======

Deaths and killed for rations to date 12,996
Lost travelling on road 216
Sold 34,830
Number at present on the station 157,002
-------
205,044
=======
Number of sheep at present on station 157,002
” cattle ” ” 5,610

In 1882 they shore 93,204 sheep, producing 383,174 pounds of wool, which brought £21,000 in London. Improvements since June 1881 have cost about £18,000. This year, 1883, they will shear 157,000 sheep, the wool from which will be worth £33,000, and the station is now valued at £200,000.

We will now consider the case of an outlying piece of country, which has never been stocked with anything but cattle, and which it is proposed to turn into a sheep-station.

The following tables of expenditure, income added to paid-up capital, and approximate increase and numbers of sheep, refer to an estimate made by the manager of a leading firm in Melbourne, for forming and stocking a piece of country in the Burke district of Queensland, about 250 miles from Normanton, a township on the Gulf of Carpentaria. The run consisted of 500 miles of the best description of sheep country, and there were on it 2000 head of cattle, and no improvements of any kind. It was proposed to form a company with a capital of £100,000 to purchase the run and stock it with sheep. The former owners agreed to take £5000 in cash, and £20,000 in paid-up shares for the property.

The accompanying tables show the position of the station at the end of four years. The run is capable, when fully improved, of carrying from 180,000 to 200,000 sheep, and would be worth at the end of four years, with the sheep, at least £150,000. In computing the cost of management £100 per annum has been allowed for every thousand sheep, whereas £70 per thousand is allowed to be the average cost; but the country being new, and labouring therefore under some disadvantage for the time being, so much more has been allowed for the cost of management.

The cost of everything has been put at the highest, and the selling price of wool and sheep at the lowest. The calculations have only been made for four years, showing the position of affairs, value of the station and stock; and the returns, if the stock were allowed to increase, and improvements to carry the extra number of sheep were made, would increase wonderfully if allowed to go on. In computing the number of sheep at the end of four years, 2½ per cent, which is usually allowed per annum for losses, has not been taken into consideration, but at the same time the percentage of lambs has been put at only 70 per cent, which is much under the mark in anything like a favourable season; the expense of water to be made in the paddocks has been put at a very high figure, and the fact of there being a good deal of natural water on the run has not been taken into consideration. If sheep were placed on the run at once, and improvements commenced, there can be no doubt that within three years the cost of management, etc., would be at least 20 per cent less than that computed. In allowing for the cost of water to be made the second and third years, a great reduction has been made, as the cost of plant, etc., would not have to be calculated; and experience has shown that, after stocking a run, plenty of water that has not been permanent before becomes so, as the country is trodden in by the stock. Due allowance may therefore be made for a certain amount of natural water lasting permanently.

ESTIMATE OF EXPENDITURE.

_First Year._

Cost of 40,000 ewes, and driving them to station £40,000 0 0
Fencing four paddocks five miles square;
fencing to consist of five wires, at £50
per mile 4,000 0 0
Dams to be constructed in each paddock 4,000 0 0
Woolsheds, hut and yards 3,000 0 0
Management, at £100 per 1000 sheep 4,000 0 0
Horses, plant, and contingencies 2,000 0 0
Rams 1,200 0 0
-----------
£58,200 0 0
===========

_Second Year._

Cost of fencing paddocks for first year’s lambs,
say 70 per cent on 28,000 sheep; three
paddocks as above £3,000 0 0
Dams made in paddocks 2,000 0 0
Management, £100 per 1000, on 68,000 sheep 6,800 0 0
-----------
£11,800 0 0
===========

_Third Year._

There would be 54,000 ewes to lamb, which
at 70 per cent would be 37,800 lambs, for
which fencing would have to be put up,
say at a cost of £4,000 0 0
Expenditure for water 2,000 0 0
Management, 96,000 at £100 per 1000 9,600 0 0
-----------
£15,600 0 0
===========

_Fourth Year._

There would be in all 132,000 sheep on the
run by this time, and if it were intended
to keep the numbers at this, the cost of
management with that amount of sheep at
£100 per 1000 would be (_though it certainly
would not be more than £80 per 1000_) £13,200 0 0
===========

CAPITAL AND INCOME during four years expended on the Property.

After paying the original owners in shares, it was proposed to call up two-thirds of the remaining capital, which, after deducting £5000 due to the original owners in cash, would leave £48,333:6:8 to commence operations with, the balance to be called up as agreed on.

Capital, two-thirds of £80,000, less £5000
paid to original owners £48,333 6 8
Clip of 1st year, 40,000 sheep at 4s. nett 8,000 0 0
” 2d ” 68,000 ” ” 13,600 0 0
” 3d ” 96,000 ” ” 19,200 0 0
” 4th ” 132,000 ” ” 26,400 0 0
Sale of increase, 14,000 wethers, half of first
year’s increase, at 5s. per head 3,500 0 0
------------
£119,033 6 8
============

EXPENDITURE.

First year £58,200 0 0
Second year 11,800 0 0
Third year 15,600 0 0
Fourth year 13,200 0 0
-----------
£98,800 0 0
===========

At the end of four years, supposing the number of sheep to be kept at 132,000, the station would be worth at least £150,000, and should return an annual profit of fully £30,000.

In fair seasons, with good management, experience shows that the above figures are below rather than above what is certain to be realised from working a good piece of sheep country. Against this there is always the danger of a drought such as the whole of New South Wales and Queensland are now suffering from. An ordinary drought can be provided against by the precaution of storing water, and by carefully avoiding overstocking the country. But a period of such exceptional severity as the drought which has now (Dec. 1884) lasted for nearly two years in the above countries cannot fail to do a certain amount of injury to everyone, and, of course, brings utter ruin to all who have not provided an artificial storage of water. A great deal of well-sinking has been done lately in Queensland, and so far with very satisfactory results. In many parts of the Burke district, round the Gulf, water has been struck at a few feet below the surface, which, of course, increases the value of the country considerably.

The effects of a drought in Australia at the present time are not nearly so disastrous as was the case formerly. In the first place, from the amount of artificial water that has been made, the country is far better fitted to withstand a severe season. In the second place, the extraordinary rallying powers of the country have been so conclusively proved, that a drought, even although the mortality among the stock at the time may be very heavy, does not produce the commercial crisis that invariably followed in the early days. The banks see that it is their interest to go on backing the squatters who are in their books, instead of selling them up, as they used to do; and the squatters whose stations are free from debt simply lay themselves out to cut down expenses in every way, and wait for better times, instead of giving way to panic and putting their property in the market at a ruinous reduction in price. A run of bad seasons may make pastoral property almost unsaleable for the time, owing to the reduction it produces in the amount of floating capital throughout the country; but it has not the effect of materially lowering prices, except in the case of unstocked and outlying runs.

Civilisation is continually extending farther inland from the coast, and as it advances the halcyon days of the squatter are swept away. It is in the early part of his tenure that he must look to realise vast profits; for when once his run is thrown open for selection, he must be prepared to secure the freehold of a great portion of it at a heavy outlay, and his subsequent profits will not exceed 10 per cent on the money expended.

There is a fine opening at the present time for investing capital in developing the country in the Gulf district of Queensland. A great deal of it is allowed to be equal to any sheep country in Queensland, and in point of carriage--always a heavy item of expenditure on a sheep-station--it compares most favourably with the Central and Western districts, where sheep are now raised most profitably; for the distance to Normanton and Burketown, on the Gulf of Carpentaria, is not above 300 miles. It further possesses the incalculable advantage of being free for many years to come from all danger of selection, and, altogether, it is undoubtedly the “coming country” of Australia; for eventually one of the chief outlets to the commerce of the continent must inevitably be a port on the Gulf of Carpentaria.

An English company has recently been formed, with a capital of £275,000, to work a large tract of country in this district; and with good management there is no doubt that they will get an excellent return for the money invested.

The new Land Bill in Queensland is not yet through Committee, but from the draft there is every reason to believe that it will be a most favourable one for the squatters, the main feature of it being that while half the squatter’s run is taken from him and thrown open to selection, his tenure of the remaining half is rendered secure. For the half which is thrown open he can, of course, compete on equal terms with any other selector.

It is an ill wind that blows no one any good, and there is no doubt that the severity of the recent drought has had an excellent effect in moderating the severity of the Land Bill. Had the so-called reform been undertaken by the Legislature in the midst of good seasons, when the squatting industry was flourishing, there is no sort of doubt that we should have been plundered in the same ruthless manner that our neighbours in Victoria have been, who have escaped the drought. “_Cantat vacuus coram latrone_”; and the Queensland squatters have suffered so severely from natural causes, that even the Government realised that it would be unwise to rob them any further for the present.