continued ... In spite of grants from the two English societies and from the Colonial Treasury, and of contributions raised locally, church building in 1840 was hindered by rising costs and scarcity of labour. As the Bishop wrote to the S.P.G. on October 24, 1840 ... "Owing to the excessive demand for labour of every kind, the wages of mechanics have risen to a most enormous rate; and materials having advanced in price in an equal proportion, we are reduced to great difficulty in carrying on the works of the several churches already commenced, and in providing funds adequate for the erection of others which are wanted. In providing residences for the Clergy we are even more impeded. It is my endeavour to manage with the utmost economy the resources entrusted to me by the Society; but I am continually required to exceed the limits which in strict prudence I should have observed, in order to prevent the stoppage of some important work. I entertain no doubt that from forty to fifty churches and chapels which have been commenced will all be finished without much addition to the means already placed at my disposal. The progress, however, must in general be slow; and, indeed, I find it prudent not to exact too rapid a progress". The Financial Collapse of 1841-1843 The obstacles in the way of church building became more serious after 1840 than pictured in the Bishop's letter of October that year. 1840 saw the finale of a boom period, during which English investors had from 1834 to 1840 poured more capital into the Colony than could be soundly employed, in spite of the spread of settlement and the ready market for Australian wool. These investors looked for a high rate of interest. The squatters and settlers required money; the banks preferred not to accomodate them, because the settlers' property was not readily convertible into cash, so they had to borrow from the merchants, who themselves had to borrow from the banks at 10%, and of course charge the settlers a still higher rate. When, however, the price of wool and stock fell in 1840-41 through over-production in relation to markets, it was clear that a crash had to come. The very name of the 'Committee on Monetary Confusion' held in 1843 showed what was then felt to be the financial condition of the Colony. Seeking its causes, the witnesses before it "agreed on the excess of English capital, the ridiculous accomodation of the banks, the speculative mania, the boundless extravagance of all classes and the fall in price of colonial products". It was not until the close of 1843 that any light pierced through the gloom. The conversion of sheep into tallow ensured a minimum price of 6/- a head instead of the 6d. at which they were otherwise forced to sell; and the 'Solvent Debtors' Act' enabled debtors to remain in possession of their properties if it was clear that they could ultimately meet their debts. In addition a 'Lien-on-Wool Act' was passed which allowed a stockholder to get an advance from a merchant of usually 1/6 a pound on his wool clip, providing that he guaranteed to sell the clip to the said merchant. As wool prices in England began to improve at the same time, and the cost of living in the colony and also interest rates had been lowered, the colony was in 1844 on the road to progress. Such was the background to a significant sentence in Bishop Broughton's letter of February 3, 1843, to the S.P.G., and indeed to the whole letter, "During the past year," the Bishop wrote, "owing to the severe losses and privations which the settlers have so generally experienced, it would have been necessary to put a stop to every operation, had I not, by presuming (I hope not too largely) on the continued benevolence of the Society, contrived to keep some necessary works in progress". Referring to churches in course of erection, he mentioned in this letter those at East Gresford, Falbrook, Paterson and others outside of the later Newcastle Diocesan boundaries. "The main difficulties attendant on their erection may be said to have been overcome. But they are now at a stand in the consequence of the discontinuance of subscriptions and the consequent failure of funds". Extracts from the 'Diocese of Newcastle' by A.P. Elkin (p. 109-112) to be continued ... Diane