Australian Dictionary of Biography

Charles Swanston (1789-1850), banker and merchant, was born at Berwick upon Tweed, Northumberland, England, the son of Robert Swanston and Rebecca, daughter of Johnston Lambert of Mordington and Margaret Handyside of Tweedmouth. At 16 he was commissioned a lieutenant in the Madras establishment of the East India Co.'s army. After some time at the Military Institute at Fort St George he joined the Madras army in the field against the rajah of Travancore and was later employed in the survey of that state. In 1810 he was a member of an expedition which obtained the capitulation of Mauritius and he was immediately appointed to make a military survey of the island, including the soundings of its harbours, bays and coastal waters, and to report on its defences. As a reward for this work, the Duke of York offered him a commission in the Brigade of Guards but he declined.

In May 1814 Swanston left England and returned to duty in India with dispatches to the governor-general. This journey was undertaken overland from Scutari to Baghdad, a distance of 1500 miles (2414 km), and was accomplished in 48 days entirely on horseback. In September 1817 he was ordered to raise 1000 men for the Poona Auxiliary Horse, and was appointed its commandant after six weeks of successful recruitment. In command of these troops he was involved in several actions and three times wounded. In 1818, after a forced march of seventy miles (113 km) performed in eighteen hours with his whole division, he captured Trimbackjee Dainglia, an agitator on whose head the government had placed a price of £10,000. This reward was never paid, as a proclamation withdrawing it had been issued just before his capture.

In January 1819 Swanston was promoted captain, but a year later lost his command because of great reductions in the army. In 1821 he was offered appointment as assistant quartermaster general of the army but declined, accepting instead the office of military paymaster in the provinces of Travancore and Tinnevelly, a position he held for six years. In September 1828 he was granted a year's leave to Van Diemen's Land on account of ill health.

He arrived at Hobart Town in H.M.S. Success on 4 January 1829 with his wife Georgina, née Sherson, and family. Although on leave, he evidently decided to settle in the country, for he soon bought Fenton Forest, an estate on the River Styx, and Newtown Park at New Town. He also acquired land at Kingborough and some 4200 acres (1700 ha) in the County of Westmorland. He returned briefly to India in 1830 at the expiration of his leave and, having resigned his army appointment, left again for Van Diemen's Land in May 1831. Now finally settled in the colony he became closely acquainted with Lieutenant-Governor (Sir) George Arthur and his chief officials, especially Captain John Montagu and Captain Matthew Forster.

In November 1831 Swanston was appointed managing director of the Derwent Bank, which was established as a partnership by a group of Hobart citizens, including several officials, and first opened for business in January 1828. Although the bank at first had seven directors, a meeting of shareholders in March 1830 agreed to reduce the number to three, one of them to be a full-time salaried managing director. The first managing director of the bank was William Hamilton, who soon returned to London as the bank's representative. Charles Swanston was appointed to succeed him; on 26 November 1831 he signed a covenant with the other two directors, Hamilton and Stephen Adey, that each should hold forty of the bank's 200 shares, and should not acquire a greater number or sell shares without first offering them to the other two. When Adey went to England Swanston bought more shares, thereby gaining a majority of votes and undivided control. Under his management the Derwent Bank prospered, attracting large amounts of overseas capital for investment at high rates of interest. He was responsible for introducing the overdraft system into Australian banking in 1834, in which year he established the Derwent Savings Bank. His influence in the colony increased when he was nominated to the Legislative Council.

In addition to the bank he conducted a big business as import and export agent, investment agent and wool broker. He imported rum, tea and other goods in quantity, acting as agent for Jardine, Matheson & Co. of Canton and for firms in Madras, Mauritius, Calcutta, Manila and the Netherlands Indies, whose goods he distributed not only in Hobart but in Sydney and Adelaide. On behalf of many officers and officials in India he also invested money in Van Diemen's Land in mortgages and bank shares. His largest investor was George Mercer of Edinburgh. In 1835 when John Batman sought support for his proposal to colonize Port Phillip, a syndicate called the Port Phillip Association was formed with Swanston and Joseph Gellibrand as leading members. Swanston's role was to obtain the necessary finance and to act in effect as its commercial manager. He included Mercer in the association.

In 1835 Batman's expedition landed at Port Phillip and bought some 600,000 acres (242,814 ha), including the future sites of Melbourne and Geelong. Recognition of the title to this land was refused by the government in Sydney and London despite strenuous efforts of the Port Phillip Association to press their claims. Settlement of Port Phillip was finally carried out under the regulations in force in New South Wales, most of the rural land being put up for auction in Sydney. An agent for the Port Phillip Association bought 9500 acres (3845 ha) near Geelong for £7919 7s. 7d., and as an act of grace a remission of £7000 towards their expenses was allowed. Most of the members of the original association had by this time dropped out; Swanston and Mercer were the sole remaining shareholders. In 1844 Swanston, in partnership with his son-in-law Edward Willis, began trading as a merchant in Geelong. The firm, which lasted until 1854, held the pastoral properties Murgheboluc, Paywit, Ocean Grove, Point Lonsdale, Gnawarre and Native Creek No. 3 in the Geelong district, and in 1846 near Harrow, a station of 112,000 acres (45,325 ha), later subdivided into several smaller runs, with Swanston & Willis retaining the Koolomurt section after the others were sold.

In October 1841 Swanston had converted the Derwent Bank into a mortgage bank. As the depression of the 1840s deepened the flow of overseas investments to the bank greatly diminished, the value of the land over which the bank held mortgages dropped disastrously, the price of wool fell and debtors to the bank found difficulty in meeting interest payments. He managed to keep the Derwent Bank going for another five years, latterly with the financial assistance of the Bank of Australasia and the Union Bank but, when in 1849 these institutions withdrew their support, he resigned and the Derwent Bank went into liquidation, John Walker being appointed liquidator. The bank's affairs and Swanston's had not been kept separate, and his liabilities were £104,375, of which £58,504 was due to the bank. Finally his creditors received 10s. in the £. In 1850, tired and worried, he sailed for America but stayed there only briefly. On his return voyage to Australia he died on 5 September and was buried at sea.

Charles Swanston had five sons and three daughters. The eldest son, Charles Lambert, took over his father's interest in Swanston & Willis in 1850 and continued the management of the properties near Geelong. He was an early subscriber to the endowment of Geelong Grammar School. Later, with his brother Kinnear, he held a large sheep station, Otama, in the South Island of New Zealand from 1864 until 1877. Two other sons, Oliver and Nowell, joined the Indian army, both retiring as major-generals. The fourth son, Robert, became British consul in Fiji. Of his three daughters, Caroline married Edward Willis.

Throughout his life in Tasmania Swanston was a controversial figure, conducting the affairs of the Derwent Bank with an autocratic hand and influencing the colony both by his financial dealings and by his intimate contact with colonial administrators. His association with the governor through his membership of the Legislative Council was friendly while Arthur held office, but sometimes bitter during Sir John Franklin's rule. In 1845, when Sir John Eardley-Wilmot was lieutenant-governor, Swanston was one of the Patriotic Six, led by Thomas Gregson, who walked out of the council leaving it without a quorum.

Swanston foresaw the great potential of the future Victoria but accepted the defeat of his Port Phillip scheme with good grace. He was unfortunate that economic circumstances beyond his control finally caused the failure of his bank and his own ruin.