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 present deplorable state of affairs in Sydney, I do not think that confidence and a healthy tone will reappear among the commercial community of that city, until all those traders and merchants, (who are not able to meet their engagements and are now striving to hang back from the fatal goal of insolvency, to which they must perforce arrive, sooner or later,) pass away, and are succeeded by a new class of merchants, possessing the full confidence of respectable houses in England; men, for instance, totally unconnected with all previous colonial transactions, and consequently never involved in that frantic mania for speculating so far beyond their means, and those reprobative practices of mutual accommodation, partial discounting, systematic bill-dishonouring, &c. which have stamped a stigma on the mercantile community of New South Wales, that will require a long time to efface in the minds of those persons in England who have suffered from their connection with that colony.

The distress, which has existed among the flock-masters of New South Wales, and the distress of the merchants and traders, are, in my opinion, much more independent of each other than is generally supposed. The grand cause of the ruin of so many of the settlers has been the depreciation in the value of stock; sheep having fallen, in a very short time, from upwards of £2. per head to about half a crown, and cattle from £9. or £10. to £1. Of course those who bought sheep and cattle at these high prices,