THE NEW ZEALAND COMPANY
1837-1858
- a short history -
Author & original source unknown

Edward Wakefield

Although his name did not appear in the list of members of the New Zealand Company Association, or that of the first governing body of its successor, the New Zealand Company, Edward Gibbon Wakefield was, in many ways, the motive force behind their formation - to give practical expression to his theories and ideas on colonisation and emigration. While remaining in the background he wrote or inspired much of the propaganda by which the Company settlers were persuaded to emigrate to New Zealand. He also won over a number of talented, influential and well-placed men whose support lent weight to his views and projects.

Wakefield's writings on "systematic colonisation" were largely a synthesis and popularisation of views and practices already current but not widely known. He argued that both colonies and Mother Country suffered from an imbalance between land, labour and capital. Britain, over-endowed with labour and capital, suffered from low wages, unemployment, harsh living conditions, restricted entry to the professions, and the waste of capital - conditions fostering social tensions and which raised the spectre of revolution. By contrast, the colonies' development and prosperity were hindered by the easy acquisition of free or very cheap grants of land. The resulting scarcity of labour drove away capital since the man-of-means disliked becoming his own labourer. The ready availability of land led to a dispersed population living at subsistence level. A settlement devoid of the refinements of a "civilised" society.

Wakefield's remedy was simple and plausible. Colonial lands must be sold at a fixed, uniform and "sufficient" price high enough to prevent labourers becoming landowners until they had worked and saved for a number of years. A high uniform price, removing the possibility of cheaper land further out, would foster concentrated civilised settlements. Part of the land sales revenue could be used to assist selected emigrants of the labouring class, giving an assured supply of labour which would attract the capitalist farmer expecting a high return on investment and a dominant social position. Wakefield believed that this would strike a balance between land, labour and capital in the colony, and that growth would inevitably follow. He also expected to see, re-created in the new world, "little England's" with all the virtues, refinements, and social and economic structure of the Mother Country, but free from all its evils - a colonial society fit to manage its own affairs. The Mother Country would likewise benefit from the migration of its "surplus capital and people, population pressure on resources would be reduced, wages rise, opportunities widen, and British capitalists, industrialists, merchants, sailors and workers could all expect to profit from new colonial markets. It was an alluring prospect.
A significant number, beguiled by Wakefield's words, invested their savings in the New Zealand Company land-orders, while others emigrated, fired by the hope of a new and more rewarding life in the Antipodes.

immigrants
Wakefield first expressed interest in New Zealand in 1836. He described it before the House of Commons Committee as "the fittest country in the world for colonisation" but expressed regret that it was being settled "in a most slovenly, scrambling and disgraceful manner". Early in 1837 the New Zealand Association was formed to colonise New Zealand on Wakefieldian lines. Its committee included a number of talented individuals, the Earl of Durham, Francis Baring, M.P., the Rev. Samuel Hinds, Sir William Molesworth, M.P., and other Members of Parliament.
In the second half of 1837 the Association applied for authority to found and govern a settlement in New Zealand. Lord Glenelg, the Colonial Secretary, intimated that the Government would consider chartering the Association as an agency of colonisation, provided, among other things, it assumed the responsibilities of a joint-stock company and offered proper guarantees to all contracting parties. The Government expected the Association members to subscribe capital. Another essential condition was prior Maori consent to any settlement. Rejecting these proposals, the Association attempted to carry a private member's Bill through Parliament to achieve its original objects, knowing it could not count on Government support.

The Government was not the only body to raise inconvenient issues. The missionary societies, fired with concern for native rights and welfare and determined to protect their interests in New Zealand, attacked the Association for its unrealistic policy towards the Maori. Wakefield and his fellow promoters most certainly associated New Zealand's future with white colonists. True, it was proposed that one tenth of the land sold to the Association by Maori should be reserved for the perpetual use of "the principal of native families", but Maori were to be a landless working class. Humanitarian groups, rightly sceptical of the association's plans, believed that 'systematic colonisation" would be destructive in both the rights and traditional way of life of the Maori and likely to hinder or cancel the good work of the Missionaries. In June 1838, the Association's Bill was defeated by a large majority, chiefly on the grounds that "it affords security neither to the subjects of the Crown [prospective investors and settlers]  nor to the natives of New Zealand".

In the months following, the Association was dissolved and the New Zealand Company founded with a nominal capital of £400,000. At its head was Lord Durham and its chairman Joseph Somes, the largest individual shipowner in England, while the directors included several former Association members together with some leading citizens of London. Wakefield remained in the background not becoming a director until April 1840. When the Company approached the Colonial Office early in 1839, advising that it had fulfilled Lord Glenelg's 1837 stipulation's and wished to apply for a charter, it was informed by Glenelg's successor, Lord Normanby, that while sympathising with the Company's aims he could not encourage or recognise its proceedings until New Zealand was annexed wholly or in part.
The Colonial Office had not remained idle while the Company was being reconstituted. Alarmed by discrediting reports of conditions in New Zealand, the Government had decided in December 1838 to negotiate with the Maori chiefs for the acquisition of sovereignty.
Captain William Hobson accepted the proposed Consulship in February 1839, and his instructions were prepared. When in March, the Company heard that the government intended to forbid all private purchases of land once sovereignty has been acquired, it hastily proceeded to organise its first settlement.

Defying a warning from Lord Normanby that the Government could not sanction the establishment of a system of government independent of the Crown or pledge itself to recognise any titles to land which it might acquire, the Company at Wakefield's prompting, despatched  Colonel William Wakefield in May in the vessel Tory to buy as much Maori land as possible in anticipation of the annexation.
Even before the company had heard of the Tory's safe arrival, it sent in September its first settlers. Contrary to its legend, the Company had not sent the Tory and the colonists to force the British Government's hand and forestall possible French annexation.
The Company well knew months before of the Government's decision to intervene in New Zealand and while the French were interested, they were non-starters in any supposed race with Britain for sovereignty. The moves were made to strengthen the company's future bargaining position.
Yet many of the Company's future problems can be attributed directly to these ill-considered actions. The scrambling way in which Wellington was founded was partly due to the Company's haste and inadequate preparation. By defying the authority of the Crown, the company antagonised the British Government and bedevilled subsequent relations with the Colonial Office and the administration in New Zealand.

Blatant Propaganda
The company's methods of attracting settlers and investors, methods devised under Wakefield's direction but not easily reconciled with his theory of colonisation, created problems and difficulties for both the Company and its colonists. At the same time, propaganda from the Company's London headquarters fostered illusions and unrealisable expectations in the emigrants. The public were informed that New Zealand was another 'Garden of Eden,' with its grassy plains, fertile soils and excellent harbours beckoned invitingly. Economic prospects were unlimited, almost every form of agriculture, manufacturing and commerce was possible and promised big returns.
The difficulties of pioneering were ignored and disquieting reports from New Zealand suppressed.
The Maori, when mentioned, were pictured as a noble and superior race, eager for the white man's ways and merchandise. One Company director publicly contrasted the situation in Britain where every occupation was "overstocked", competition for employment "excessive" and the profits of capital "scanty". With the prospects of New Zealand under the Wakefield system, he claimed, "with moderate prudence and exertion, every man can obtain a comfortable subsistence and a numerous offspring instead of being a burden, is the greatest of benefits."
This message of hope was directed at the "uneasy classes" - people in the middle rank of society, together with all those who aspired to it - the thousands of wage earners with enterprise and ambition, wanting only opportunity. company agents in fifty-two strategic centres through-out the British Isles 'wooed' prospective emigrants with such propaganda, spurred on by a commission of 40/- for every married couple and 10/- for every unmarried adult enrolled on the Company's books.


The Company's method of attracting investors and "colonists" (the land buyer, not the labouring emigrant) encouraged speculation and absenteeism, deterred the genuine farmer and created immense problems in New Zealand. The Wakefield system involved selling land,  or rather, land- orders, since the Company could not sell land it had not yet surveyed and subdivided, before buyers left England. The proceeds would then be used to prepare the site for settlement, carry out essential public works, and pay the passages of thousands of labourers who would be employed by the land buyers.
The Wellington land was sold at the uniform price of £1 an acre, in land-order lots of 101 acres - ie. one acre of town land and 100 acres of country land. The Company sold 1,000 of these orders in 1839 before the Wellington site had even been prepared. A lottery was used to determine the order in which purchases could select their town and country sections, a brilliant device from the Company's point of view, for it gave the Company as good a chance of selling the last land-order as the first.
Most buyers hoped an early choice of the town acres would allow them to subdivide and sell or rent in smaller lots to merchants and others needing land near the wharf or the main streets.
An early choice among the country sections would bring land close enough to town to be subdivided for future suburbs or suitable for the establishment of a market town. Again, fertile country land could be leased or sold in small plots to ambitious agricultural labourers. An early lottery draw, therefore, brought hopes of a quick and easy wealth. Many buyers with land-orders, including directors like Wakefield and Molesworth, remained comfortably in England hoping to profit from the needs of others less fortunate in the lottery.
Absenteeism, in turn, created an imbalance between labour and capital in the settlement. Insufficient buyers emigrated to provide work for the labourers despatched by the Company and few genuine farmers were prepared to buy unseen land selected by the spinning of a lottery wheel at £1 an acre, when land in North America and Australia cost 5/- an acre.

The Harsh Reality
When in January 1840, the first of the Company settlers arrived in Wellington Harbour they encountered a few surprises. The harbour entrance was narrow and dangerous, the land suitable for settlement was limited and hemmed in by bush-clad hills, the team laying out Wellington settlement had barely begun its survey and there was no shelter for passengers and their property.
Complaints were voiced immediately and they never abated during the Company's years of activity. The settlers soon discovered that the Company's title to the land was questionable.
Colonel William Wakefield, the Company's principle agent, claimed to have purchased 20 million acres, mainly in the middle districts of New Zealand, but his methods did not always meet close examination and on occasions he had not enquired into the bona fides of the Maori people prepared to sell. Disputes arose almost immediately. Company surveyors encountered Maori opposition at Pipitea, Te Aro, Porirua, in the Hutt Valley, and at Wanganui.
Following the signing of the Treaty of Waitangi, a Government Commission was appointed to enquire into the validity of the Company's purchases. The Company had known this was likely but the Government's decision came as a shock to the settlers who soon became alarmed by the leisurely pace of the enquiry. Settlers discredited both the Government and the Company, while Company officials and Government engaged in mutual recrimination. The Company established two shaky settlements at Wellington and Wanganui in 1840.

Later that year the Company and the Colonial Office made their peace in London. Lord John Russell, the new Colonial Secretary, decided to recognise the Company as an instrument of government in the colonisation of New Zealand and it was granted a charter of incorporation and a generous land title. 
The Company was obliged to disclose expenditure on the purchase of native land, on the despatch of settlers and on surveying, public works and other incidentals. For every pound spent it was to be entitled to four acres of land. Thus encouraged, capitalising on government support and the fact that New Zealand was news, the directors proceeded with plans to found two further settlements. Again in haste, characterised the Company's proceedings. It sold land and recruited colonists before locating either settlement.

The first new emigrants arrived at New Plymouth in November, 1841. New Plymouth lacked a suitable harbour, the available land was limited, the survey incomplete and trouble with the Maori was to be a never-ending problem. 
Nelson was founded in October 1841. Its harbour was hazardous too and again there was insufficient land suitable for farming. The settlers cast covetous eyes on the potentially rich Wairau Valley, claimed by the Company by right of purchase, although Te Rauparaha and Te Rangihaeata stoutly denied this.
An attempt by Captain Arthur Wakefield and a band of settlers to force the issue ended disastrously. The Wairau Massacre was a serious blow to the Company, immigration fell off and the Company's financial situation deteriorated. Plans for a further settlement were shelved and in 1844 the Company suspended operations.

Settlers Grievances.
The four Company settlements in the mid 1840's revealed certain common features. All were struggling, though a few people had made a killing through speculation. Company directors had given themselves fat salaries and with tender solicitude rewarded shareholders with regular dividends of 10 per cent from September 1840 to April 1842. But genuine settlers had turned against the Company by the mid 1840's.
They catalogued its unfulfilled promises and many regretted their decision to emigrate, damning the Company for its misleading propaganda. Others demanded legal redress, threatening to sue. The local Government was also under attack for its insistence on Maori rights and neglect of settler interests, its land pre-emption policy, the delay in issuing valid land titles, its refusal to punish Maori leaders "responsible" for the Wairau "massacre" and its failure to protect the scattered white settlements.
Company agents and settlers took the law into their own hands, evicting Maori "squatters" or those who pressed inconvenient land claims creating a legacy of racial bitterness which boded ill for the future.

No settlement fulfilled Wakefield's theory or the Company's propaganda. Labour and capital were unbalanced. In Wellington, sales to actual colonists approached 50 per cent of all land sales, while the number of land purchasers who emigrated to Nelson and New Plymouth was insignificant. Many disappointed colonists left.
By 1848 only 85 of the original 436 Wellington colonists remained. Only 40 out of some 60 remained in Nelson, and the numbers were to decrease still further.
The Company had despatched far to many labourers who could not find private employment. Company agents employed a host of them on public works at ruinous cost until forbidden by London in 1844. Many labourers left, while others purchased or leased Company land, in lots ranging from one-quarter of an acre to 10 acres. The absence of sufficient 'capitalist-farmers' prevented labourers becoming landowners too soon. Under pressure, the Company's agent permitted a number of Nelson colonists to exchange their acres of gravel, swamp and hillside for unsold sections capable of cultivation, until London forbade it. Everywhere the hills and swamps, bush and bracken discouraged settlers who contemplated farming. The agricultural settlements of Wakefield's imagining's did not eventuate. The real agriculturists were the Maori who supplied most of the colonists' requirements.

The social structure of the Company's settlements bore little relationship to Wakefield's ideal of civilised communities with all the trappings and refinement of cultivated society. Men of quality did emigrate but in small numbers and many left. The few who remained frequently engaged in political agitation, leading the demand for representative government. Frontier settlements were characteristic of those early years.

After 1844 the Company was in decline. Its debts mounted, but it received assistance from the British Government. During the last of its activities, the Company could claim an indirect share in the success of two church- sponsored ventures, the Otago settlement of 1848 organised by the Lay Association of the Free Church of Scotland and the Canterbury settlement of 1850 backed by leading members of the Church of England.
In 1850 the Company ceased to operate as a colonising body and surrendered its charters. Under the terms of earlier agreement, the Crown came into possession of the Company's entire landed property in New Zealand ( just over 1,000,000 acres), for which it was bound to pay £268,000. By the terms of the 1852 Constitution Act this amount became a first charge on the land revenue of New Zealand.
When the colonists discovered that, in effect , they were obliged to accept responsibility for indemnifying the Company's shareholders, their anger knew no bounds. The loudest complaints were voiced in Auckland, a settlement which owed nothing to the New Zealand Company.
When in 1858, the Company was finally dissolved it passed unregretted from the scene.
While its theory of colonisation was laudable, it had failed in practice.

[For more on this subject - 'Fatal Success', A History of the NZ Company by Patricia Burns, Heinemann Reed 1989]