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in business for the next twelve months at least. Extensive failures are of almost daily occurrence under the existing and unforeseen pressure of the times. Our banks are determined to act liberally to all their customers. Merchants and tradesmen are following the same rule towards each other. It is anticipated that this mutual forbearance between man and man will after some lapse of time restore confidence, when every branch of trade will resume its wonted tone of health and vigour, and much of the wealth produced by the gold diggings will find its way for investment to this colony, where every luxury and necessary of life may be produced and enjoyed in peace.

“ After the present crisis is over, and confidence has been again restored, South Australia will experience a flow of wealth and prosperity unexampled either in present or past times by any colony acknowledging the sway of the British empire."

CHAPTER III.

THE COLONY OF VICTORIA, ITS EARLY HISTORY, AND RAPID

DEVELOPMENT, THE CITY OF MELBOURNE, AND THE TOWN OF GEELONG-THE PASTORAL DISTRICTS—CAPABILITIES OF THE COLONY.

In the voyage out, as described in the first chapter, the journey terminated at the city of Adelaide, the capital of South Australia ; but had the destination of our ship been Port Phillip, she would have taken a different course, and instead of wearing to the north for the Gulf of St. Vincent, would have continued to steer eastward till she reached Bass's Strait; bearing then to the northward, the land would come in sight on our left hand, and as we rapidly advanced, Cape Schank would soon make its appearance on the right, and our course would then lie between shores that stretched away on either side, bold and high and everywhere surmounted by the evergreen forest that thence stretched inland. In the distance ahead the land gradually closes in to a narrow inlet, forming apparently the bottom of a deep and dangerous gulf, as the furious surf with which it was lined would lead us to believe. On a nearer approach, however, the rocky coast in front is seen to be parted by an opening whose smooth waters proclaim it to be the entrance to some inner haven. The contracted passage which thus comes into view so unexpectedly serves to separate two promontories scarcely three miles apart at the points nearest to each other: that on the west is called Point Lonsdale; while the other, Point Nepean, is a long strip of rocks and sand. Upon rounding the latter, we are at once shut out from the open sea, and transferred to the threshold of a magnificent bay. Port Phillip Bay, into which we have thus passed, is certainly one of the noblest of its kind; in reality it is an inland sea of considerable extent, about forty miles in length by thirty in breadth, along whose winding shores are to be found many inlets and bays, each one capable of sheltering whole fleets, the most conspicuous of which is the Bay of Geelong, a fine expanse of water running deep into its western shore, and called, from its extreme beauty, “ the second Bay of Naples.” At the upper extremity of the lake lies Hobson's Bay, the port of the city of Melbourne, which is the capital of that splendid pastoral country, formerly a district of New South Wales called

the Port Phillip District, but now the independent colony of Victoria.

Our knowledge of the existence of the Bay or Lake of Port Phillip is due to Lieut. Murray, of the Lady Nelson, who ascertained its existence in carrying out a series of exploring expeditions projected by Governor King. The description by the discoverer of the portion which he beheld, and especially of the shore, written, as it was, about fifty years ago, might nevertheless be copied by the traveller of to-day without a word of alteration, so exactly does it convey the principal features by which the surrounding locality is marked :-" The southern shore of this noble harbour is bold high land in general, and not clothed, as all the land of Western Port is, with thick brush, but with stout trees of various kinds; and in some places falls nothing short in beauty of appearance to Greenwich Park. Away to the eastward, at the distance of about twenty miles, the land is mountainous. There is one very high mountain in particular which in the meantime I named Arthur's Seat, from its resemblance to a mountain of that name near Edinburgh.” Subsequently the enterprising Flinders made an accurate survey, and the report which he brought back was so favourably received as to induce the Government, about a couple of years afterwards, to choose it as a place for the establishment of a penal settlement. The spot, however, selected for the purpose was (fortunately) the worst within a wide circuit; it was upon Point Nepean, the headland of which, running out from the east, parts the bay in that direction from the sea. On further trial nothing was found to counteract its many disadvantages; water could only be procured at that point by digging wells in the sand, a source, however abundant at the time, far too limited to supply a growing population. The country in the immediate neighbourhood showed no prospect of being properly cultivated, and at the same time, no vigilance could prevent the convicts from making their escape to the woods. Governor Collins therefore abandoned his original purpose, and set sail for Van Diemen’s Land, and landing there on the shores of one of the finest bays in the world, laid the foundations of Hobart Town.

For many years subsequent to this attempt, the magnificent country of Port Phillip continued undisturbed by the foot of a white man; for of the many exploring parties sent out by private individuals, as well as by the Government of New South Wales, none followed the road to Port Phillip; probably deterred by the unfavourable circumstances under which the first

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