The Baillieu family is one of the most famous dynasties in Australia, but while the family name is well-known, little is known of its history and much that is 'known' is incorrect or at least misinterpreted.¹ William Lawrence Baillieu, the founder of the Baillieu family fortune, is remembered almost exclusively because he paid his creditors sixpence in the pound (equivalent to 2.5 cents in the dollar) following a secret composition during the financial crash of the 1890s. Few realise that he was involved in the establishment of almost every important mining and industrial enterprise in Australia between 1895 and 1930, and a strong case can be made that he played a greater role in shaping the modern Australian economy than any other person. Tall, handsome and with a magnetic personality that inspired great loyalty, Baillieu became the unofficial but acknowledged leader of the Collins House group of closely interlocked companies that dominated many sectors of the Australian economy in the first half of the twentieth century, and whose legacy even today survives with such companies as Rio Tinto, Orica, the ANZ Bank, Oz Minerals, Pacific Brands, Paperlinx, Amcor, and many others. One of Baillieu's chief lieutenants, WS Robinson, wrote, 'He was a great leader, easy to understand and full of understanding himself ... his courage and vision and the ease with which he commanded the loyalty and friendship of others placed him at the head of his fellows.'²

In spite of his prominence in the business community, there has never been a full biography of Baillieu and many aspects of his career are still shrouded in mystery. In particular, many myths have grown up concerning his activities during the land boom and bust of the late nineteenth century. While still in his twenties, Baillieu made a fortune speculating in real estate between 1885 and 1888. When the land boom ended, his riches disappeared as quickly as they had been acquired, forcing him to make his secret composition with his creditors in 1892. Then, during the worst depression in Victorian history, Baillieu built a new and lasting fortune based on mining, share trading, newspapers, real estate and breweries. His recovery during the grim years from 1892 to 1900, when most businessmen were battling just to survive, has always been the great mystery of Baillieu's career. Many of the answers to the mystery lie in files held by Public Record Office Victoria (PROV).

The Melbourne land boom of the 1880s ranks along with the South Sea Bubble as one of the great speculative booms of history.³ By the middle of 1888 land prices reached extraordinary levels. Prices in the central business district rivalled those of London and speculators were paying sky-high prices for 'sub-divisional land' far beyond the suburban fringes of Melbourne.⁴ When £50,000 was paid for 500 acres of poor soil 26 miles from Melbourne, The Times of London commented that in England £50,000 would buy an estate of 1,550 acres 'with a really grand old mansion built by an eminent historical personage, a deer park, walled gardens, lawns, terraces, cedars, and six park lodges, one mile and a half from a railway station, and within thirty miles of London.'⁵

All bubbles eventually burst and the inevitable downturn began slowly in 1888 and gathered momentum over the next few years, before culminating in April 1893 with the closure of most of the trading banks operating in Melbourne. The fall in land prices in Melbourne was almost unbelievable. In July 1888 the Chatsworth Estate Company bought 1485 acres at Bulleen for £175 an acre – by 1893 the company's liquidator was struggling to find buyers at £30 an acre.⁶ Much land, particularly on the edge of Melbourne, was unsaleable after 1890. Land companies, which had bought thousands of acres at the height of the boom, were left with vast tracts of essentially worthless land. Frequently the only income from an investment of hundreds of thousands of pounds would be a few pounds a year from a local dairy farmer for grazing rights.

WL Baillieu's early career is a typical story of the land boom. Born of poor parents in Queenscliff in 1859, Baillieu worked as a bank clerk until 1885 when he set up as a real estate agent in partnership with Donald Munro, the son of leading land boomer, James Munro. Baillieu was a brilliant salesman, while James Munro pushed business toward his son, and within two years Munro & Baillieu was Melbourne's leading real estate agency. In the 12 months to October 1888 the partnership profits were £168,000 – at least $20 million in 2009 prices.⁷ This made Baillieu a rich man. He set up his parents and numerous brothers and sisters in grand style, and with his father-in-law, Edward Latham, he built 'Raheen' in Studley Park Road, now the home of the Pratt family.

The wealth was lost as quickly as it was won. Munro & Baillieu invested most of their profits in outer suburban land and partly-paid shares in land companies, and borrowed a further £100,000 to buy still more land, all at the top of the boom. As soon as the bubble burst, most of the land became unsaleable and the shares a liability as calls greatly exceeded the share prices. In October 1892 Baillieu wrote to one of his creditors, 'My position I regret to say does not get stronger financially. Each day something drops away that one regards as an asset.' By this time Munro & Baillieu was insolvent.

Donald Munro disappeared into obscurity, but WL Baillieu rebuilt his fortunes in an extraordinary fashion during the gloomy years of the late 1890s, emerging from the depression with his wealth restored and positioned to become one of the most influential Australian industrialists of the first half of the twentieth century.

The records held by PROV are critical for understanding both WL Baillieu's rise and fall in the 1880s and 1890s and his later rise to lasting success. Obviously the standard family history research tools such as births, deaths, marriages, wills and probate are useful for constructing a framework. Baillieu's parents arrived in Australia in 1853 and had 16 children, so the family structure rapidly became extremely complicated, particularly as the same names recur frequently throughout the family. As the records series relevant for family history research are the most used series at PROV, they are now user-friendly and it is rare to encounter difficulties finding the relevant files.