No mention of a dishonourable transaction was ever associated with his name

Robert Barr Smith grew up in Lochwinnoch, a little village South of Glasgow with his mother, Marjorie Barr, father, Rev. Dr Robert Smith, and ten siblings.  His father was a man of determination, high principle and ‘evangelical bent’, who accepted a stipend of a mere £283 to pursue a career in the new Free Church.  Consequently, Robert’s family was “seriously poor (very),” and they often had to rely on the generosity of Marjorie’s father, Captain William Barr, to get by (Barr Smith et al. 1996, p. xvii).

“Robert never forgot the habits of frugality forced on him by these circumstances” and perhaps, it's these unfortunate circumstances, so early in his life, that ignited Robert’s lifelong habit of accounting for all of his expenses, no matter how trivial (Barr Smith et al. 1996, p. xviii).  It is clear that this habit contributed to him becoming a highly successful businessman.

Not wanting to be a financial burden on his parents, Robert set out for Australia in 1854 to recover the £1000 pounds he had borrowed from his mother, which he suspected may have been squandered by his then business partner, Hamilton, in Melbourne.  It was here that he joined his brother-in-law, Thomas Elder, in business in South Australia.  Together, they were pioneers in commerce, Australian shipping and pastoral development, paving the way for Australian exploration and expansion, trade and settlement and profitable outlets/markets for Australian produce (Johns 1919).  Tom’s “imaginative and daring enterprise” and Robert’s “meticulous financial genius” made them both extremely rich and, by the end of his life, Robert had amassed a fortune of £1,799,500 - the largest fortune in South Australia at the time (Barr Smith et al. 1996, p. xx). So how did he achieve this?

A common theme of Robert’s business ventures, recorded in his ‘Commonplace books’ is the spreading of his financial risk.  He would never put ‘all of his eggs into one basket’.  Rather, Robert’s approach was one of diversification, taking only part shares in a company and dividing land amongst many shareholders, minimising his chances of failure.  This strategy also allowed him to successfully invest in a number of South Australia’s diverse and developing industries including mining, shipping, pastoral, banks, etc., and by the end of his life “there was not an industry in the State that did not owe much to him either directly or indirectly” (Barr Smith et al. 1996, p. 254).  

Robert’s shrewd approach to spreading his risk and furthermore, achieving a balance between risk and return can be seen when his company, Elder, Stirling & Co., financed WW Hughes (the owner of a mine site) to develop the Wallaroo copper mines in 1859.  Robert was concerned that his company was assuming all the risk of the venture but only receiving a very small portion of the reward.  He negotiated a new agreement which saw the division of the profits into five equal parts, “one fifth each to Hughes, Stirling, Taylor, Elder and Barr Smith” (Barr Smith et al. 1996, p. 5).  Ultimately, this decision made all five men extremely wealthy.  

Robert’s ‘Commonplace book no. II’ contains many further examples of his astute business sense including diversification and risk management through a variety of investments, namely government bonds, land and buildings, stocks and shares, bank deposits and other assets.

The first excerpt above details investment in a number of government bonds in South Australia and NSW, with every detail meticulously recorded including bond yields, face value and cost.

The second excerpt on Aldgate land lots shows land divided into seven parts/persons and details the allotment number, area, value and cash bonus of each allotment.  

Interestingly, the third excerpt from 1893, details personal deposits which he made for his seven surviving children between six banks.

The above demonstrates that Robert was uniquely clear sighted and enterprising in all aspects of business and in personal related matters.  “No mention of a dishonourable transaction was ever associated with his name” and his wisdom and tutelage was always “a guarantee of success” (Barr Smith et al. 1996, p. 254). For this reason, his assistance and counsel was sought by men of all walks of life including mercantile men, financiers and even politicians (The Mount Barker Courier and Onkaparinga and Gumeracha Advertiser 1915).

There can be no doubt that the extent of Robert’s success resulted from his strong principles and astute business sense, most likely developed from his childhood hardships.  Perhaps the reason why Robert approached business in such a meticulous way was a deep desire to afford his children the opportunities and stability that were not available to him as a child.  An example of this is the multiple bank deposits above.

However, Robert also had a “sense of ambition and pride in advancing the province as well as himself.”  Like many of the pioneers before him, Robert held an “attitude of civic responsibility”, which was unique to the pioneers responsible for South Australia’s development and growth (Barr Smith et al. 1996, p. xvii). Many of the “invading” Scots at the time made their fortunes and then returned to the country of their birth but Robert, with his business partner Tom, saw South Australia’s potential and with their daring and shrewdness, took many risks and by ‘spreading their risk’, became the wealthiest, most respected and influential men in South Australia at the time (Barr Smith et al. 1996, p. xxv).

Post written by Rebecca Lewis for fulfillment of the UniSA Graduate Diploma in Information Management internship program in 2021. 

Sources

Barr Smith, J, Gosse, F & Barr Smith, R 1996, Joanna and Robert : the Barr Smiths’ life in letters, 1853-1919, Barr Smith Press, Adelaide.

Barr Smith, R ‘Commonplace Book no. II.’ Barr Smith Family Papers. Special Collections, MSS 170, Series 7, Barr Smith Library, The University of Adelaide.

Johns, F 1914, ‘Mr. Robert Barr Smith. Pioneer, Merchant Prince, Public Benefactor’, The Mail, 31 January, viewed 7 May 2021, <http://nla.gov.au/nla.news-article59642458>.

The Mount Barker Courier and Onkaparinga and Gumeracha Advertiser 1915, ‘Mr. R. Barr Smith’, The Mount Barker Courier and Onkaparinga and Gumeracha Advertiser, 5 February, p. 2, viewed 7 May,   <http://nla.gov.au/nla.news-article146297021>.