Parallel to the changing policies in the 1820s and early 1830s was the dramatic expansion of squatting. Squatting, originally, in a pastoral context, was the unauthorised creation of stock stations on vacant Crown Land and arose when and where a landowner’s increasing stock numbers out-grazed the land available to him by grant, purchase, lease, or permit. A negative view of squatting remained important through to the mid-1830s. In 1815, a witness before a House of Commons Committee commented
These persons are almost invariably the instigators and promoters of crime, receivers of stolen property, illegal vendors of spirits, and harbourers of runaways, bushrangers, and vagrants.
James Macarthur (the son of John) writing in a similar strain in his book on NSW in 1837, spoke of
....persons denominated squatters [were] mostly convicts holding tickets of leave or having become free by servitude who [carried on] an extensive system of depredation upon the flocks and herds and the property of the established settlers.
Squatting, apart from these alleged dishonest characteristics, was a natural consequence of the absence of a land policy suited to the changed conditions. As long as the Government gave land away to applicants with capital to invest and to others whom it wished to benefit, persons who had not benefited regarded the unoccupied areas beyond the Blue Mountains as available to those who chose to occupy them. It proved impossible to restrain settlement within prescribed limits while there were valuable grasslands stretching for hundreds of miles beyond the official boundaries. Whatever the regulations, NSW Governor Gipps was right when he wrote in 1840:
As well attempt to confine an Arab within a circle traced on sand, as to confine the graziers or wool-growers of New South Wales within bounds that can possibly be assigned to them.
In the 1820s and 1830s it was common for squatters to follow in the tracks of explorers such as Thomas Mitchell and Charles Sturt and grab the best-watered pasture they could find for their flocks and herds. One writer noted that ‘dispersion’, not confinement, was the natural law of settlement. It was not surprising that a theory of ordered settlement and colonisation, propounded by Edward Gibbon Wakefield, gained the attention of the British government. South Australia was settled according to his plan, which married land sales, labour and capital as an enticement to free, respectable British settlers. At Swan River settlement, the attempt to use convict labour and to apportion land by grant met with a host of problems and seemed to indicate that Wakefield’s ideas had merit.
In eastern mainland Australia, the original impetus for squatting in the early 1820s was primarily an expanding Sydney meat market and secondly experimentation with wool production, with added impetus from emancipist and native-born families in search of social and economic freedom. Squatting took on fresh vigour and its actual name of squatting in 1836 with a British wool market that strengthened pastoral diversification and drew new pastoralists from VDL and from Britain. In turn, the creation of Melbourne and Adelaide expanded the meat markets for the ‘Sydneyside’ cattle holders, just as the goldfields populations would do on a grander scale in the 1850s. Despite a pastoral myth that sees wool as the creator of squatting, it is possible that sheep grazed no more land than did cattle in eastern Australia even as late as 1860.
The ‘Nineteen Districts’, 1829
The first steps in establishing wool production in NSW also created an increased demand for land. Squatting activity was often carried out by emancipist and native-born colonists as they sought to define and consolidate their place within society. From the mid-1820s, however, the occupation of Crown land without legal title became more widespread, often carried out by those from the upper echelons of colonial society. As wool began to be exported to England and the colonial population increased the occupation of pastoral land for raising cattle and sheep progressively became a more lucrative enterprise. By 1831, Australia was supplying 8 per cent of British wool imports. Nine years later the proportion had risen to 28 per cent and by 1850 to 53 per cent. Sheep grazing stretched out well beyond the hinterland of the first settlement, into what later became Victoria, Queensland, and South Australia, although pastoralists remained in the relatively well-watered districts. Progress was not smooth. The years between 1825 and 1828 were marked by depression, caused initially by falling wool prices in England and made worse by drought in Eastern Australia. Expansion was resumed after 1828 and continued throughout the 1830s; by 1840, however, profits were again being squeezed between rising costs and slightly falling wool prices. The optimism that had characterised the 1830s evaporated, credit was restricted, and serious depression occurred. During this period of pastoral expansion wheat production had failed to keep pace with the growth of the population of NSW. The environment was not generally well suited to arable farming that became the occupation of poor men with inadequate resources. Supplies were imported from VDL, but by the 1840s South Australia began to supply NSW with wheat and during the next half-century emerged as the principal grain-growing region of Australia.
‘Squatting’ had become so widespread by the mid-1830s that Government policy in NSW towards the practice shifted from opposition to regulation and control. It was clearly necessary to impose some rule in regard to the occupation of these outlying lands. Despite a popular belief that squatting was a general Australian experience, squatting hardly existed in the other colonies. In VDL, where there were few cattle, lax land administration in the 1820s had allowed sheep owners all the freehold land they wanted and the owners found their squatting outlets in the Port Phillip District of NSW. In Western Australia, massively liberal land grants, low initial stock numbers and a tiny domestic market, deferred for many years any perceived need to graze Crown land. In South Australia in 1836, the founders’ Wakefieldian agriculturalist philosophy of settlement, reinforced in the 1840s and 1850s by the province’s emergent agricultural and copper-mining industries ensured that squatting in the province would not become a major activity. In effect, VDL, Western Australia, and South Australia were largely spectators of the eastern mainland’s resolution of squatting.
Sheep, South Australia, c1880
 Weaver, John, ‘Beyond the fatal shore: pastoral squatting and the occupation of Australia, 1826 to 1852’, American History Review, Vol. 101, (1996), pp. 980-1007.
 Cit, Roberts, S.H., The Squatting Age in Australia 1835-1847, (Melbourne University Press), 1935, p. 70.
 Macarthur, James, New South Wales; its Present State and Future Prospects: being A Statement, with Documentary Evidence. Submitted in support of Petitions to His Majesty and Parliament, (D. Walther), 1837, p. 44.
 Oldham, W., Land policy of South Australia: from 1830 to 1842, (G. Hassell & Son), 1917 and Ellis, Julie-Ann, Public land and the public mind: origins of public land policy in South Australia, 1834-1929, (Flinders University Oress), 1995.
 Fletcher, B.J., Landed Enterprise and Penal Society: A History of Farming and Grazing in NSW before 1821 (Sydney University Press), 1976, Beever, E.A., ‘The Origins of the Wool industry in NSW’, Business Archives and History, Vol. 5, (2), (1965), pp. 91-106, Ker, Jill, ‘The Wool industry in NSW 1803-1830’, Business Archives and history,Vol. 2, (1962), pp. 18-54, P. Fogarty, P., ‘The New South Wales Pastoral Industry in the 1820s’, Australian Economic History Review, Vol. 8, (1968) , pp. 110-122, Beever, E.A., ‘Further Comments on the Origin of the Wool industry in New South Wales’, Australian Economic History Review, Vol. 8, (1968), pp. 123-128. See also, Abbott, G.J., The Pastoral Age: A re-examination, (Macmillan), 1971.
 This idea that sheep were the major reason for squatting was encouraged in ibid, Roberts, S.H., The Squatting Age in Australia 1835-1847.
 Forrest, Sir John, Report on the land policy of Western Australia, from 1829-1888: accompanied by various returns, land regulations, and a map, (Government Printer), 1889.
 Prest, Wilfrid, Round, Kerrie and Fort, Carol S., The Wakefield companion to South Australian history, (Wakefield Press), 2001, pp. 513-514 provides a succinct summary of squatter activity in the colony. See also W.L.R., Our wool staple; or, A history of squatting in South Australia, (John Howell), 1865.