When Philip Gidley King, Hunter’s replacement arrived, he found depressed settlers, flourishing middleman, labourers demanding high wages and farming devastated by a combination of flood and bush fires. His immediate aim was to reverse Hunter’s policies by treating all settlers equally, by reducing the number of assigned servants to two per settler and introducing a more competitive market for grain by allocating government orders among the settlers in proportion to their crops. Convict labour was also made profitable by making them work for the state rather than clearing land for settlers. Instead of dispersing labour, King concentrated it on a large government farm at Castle Hill. This resulted in a revival of individual enterprise and by 1802 cultivated land had increased by a quarter and the colony was self-sufficient. Although this resolved the immediate threat of famine, it was not a solution to the inadequacies of many settlers who were ‘without either property to employ others or abilities to work themselves’. He urged that instead of sending labourers to NSW, farmers with capital should be encouraged to come to the colony believing that they could revive effective and efficient private farming. However, this faced sustained opposition from Macarthur and the officers of the NSW Corps.
Philip Gidley King
The system of public farming, originally introduced by Hunter, proved remarkably successful under King to such an extent that by 1802 it was producing a surplus of grain. A simple solution would have been to export any surplus but King had prohibited this. If public agriculture was efficient but settlers could not sell their surplus outside the colony, free colonisation was doomed. In 1804, Hobart ordered that government farming should be curtailed and government herds dispersed. The focus was now on settlers and it was the central element of the new economic policy to aid them as much as possible. More bond labour was to be allowed, stock was to be given to successful settlers and the government was to advance loans to stimulate enterprise. This was combined with an ending of the closed market with the ending of guaranteed prices, the operation of supply and demand and the introduction of a system of tenders with safeguards against the monopolists. This represented a shift away from government activity towards free enterprise. While control of the minutiae of life especially leading agrarian change in NSW by the governor may have been justifiable during its struggle for survival but there were limits to what government alone could achieve. By giving special terms to men with capital who could develop the colony, such as the Blaxland brothers who obtained grants of 8,000 acres in 1805 on condition that they spent £6,000 and by the development of an export trade for surplus products, Hobart and King moved NSW towards a market economy in which individual enterprise would be rewarded. This resulted in a change in land policy that was for the first time linked to expansion rather than static subsistence. The NSW government wanted to group settlers round ‘townships’ or shires of up to 30,000 acres with farms radiating from centrally placed ‘towns’. This would have the effect of gradually colonising the interior and as these lands were not retained by government but vested in certain ‘Resident Trustees’, chosen by settlers and other farmers in the district stimulate further growth. 
Under King, there was a radical transformation in land settlement. When he arrived in 1800 there were 401 proprietors with grants for 43,786 acres of land; when he left there were 646 with 84,466 acres. The settled districts had increased to below Windsor and the intervening land had in general been occupied. The area under cultivation had almost doubled and the population of the colony had increased by 4,936 to 7,052. King had played a central role in furthering these changes despite the opposition of the NSW Corps. It was, however, not until after the Rum Rebellion against King’s successor William Bligh that these soldiers were demobilised and the greatest obstacle to sustained expansion was eliminated. 
While Bligh’s land policy had been moderate and progressive, following his deposition there were two years of retarded development as first Johnston, then Foveaux and Paterson endorsed different policies. Johnston was moderate in his approach; Foveaux made few grants while Paterson, revived the unstructured grants associated with Grose issuing 413 grants of 64,475 acres in a year. There are grounds to support Bligh’s later assertion that the administrators gave land to individuals who they believed would support their interests. Their grants were rendered void when Macquarie took over although the Colonial Office gave him discretionary powers to confirm these grants as he deemed fit. By 1809, there were 737 settlers out of a total population of 10,482 holding 95,637 acres (an average of 128 acres each) with 7,615 acres under cultivation and 74,569 acres of pasture.
 See King to Portland, 25 September 1800, HRNSW, Vol. 4, pp. 177-186.
 Government and General Orders, 1 and 2 October 1800, HRNSW, Vol. 4, pp. 220, 222.
 King to Hobart, 9 November 1802, HRNSW, Vol. 4, pp. 899-900.
 King to Hobart, 1 March 1804, HRNSW, Vol. 5, pp. 329-330.
 See, Gregory Blaxland to Under-Secretary Cooke, 24 October 1804, HRNSW, Vol. 5, pp. 479-480 and Gregory Blaxland to Under-Secretary Chapman, 1 March 1805, HRNSW, Vol. 5, pp. 568-569.
 The Colonial Office approved of this and included it as part of Bligh’s instructions, 25 May 1805, HRNSW, Vol. 5, pp. 640-641.
 King to Camden, 15 March 1806, HRNSW, Vol. 6, pp. 34-40, 43-45 provides a summary of King’s achievements.
 The decline in agriculture is evident in Civil Officers to Bligh, 18 February 1809, HRNSW, Vol. 7, p. 36 and in Foveaux to Castlereagh, 20 February 1809, HRNSW, Vol. 7, pp. 39-40.
 See, for example, Foveaux to Castlereagh, 20 February 1809, HRNSW, Vol. 7, p. 41.
 Proclamation, 4 January 1810, HRNSW, Vol. 7, pp. 256-257.