looked with small
favor upon a class of men whom they regarded as troublesome intruders,
and whose proceedings rendered it almost impossible for the pastoralists
to procure sufficient labor to carry on their operations. The squatters
chose to overlook two important facts; viz., that they had themselves
originally acquired their position precisely as the digger acquired his,
and that the presence of the digger, if it raised the price of labor,
also enormously increased the prices of the squatter's produce.

But more immediate financial troubles began to press upon the
Government. It had been necessary, not merely to add largely to the
number of the official staff--to provide additional police,
commissioners, magistrates, customs officers, etc.--but also to increase
their pay in some proportion to the greatly increased cost of living.
Even with an increase in their salaries of 50 or 100 per cent, the
subordinate officials would not stay. The sight of the reckless and
prosperous diggers who came down to Melbourne to spend the Christmas of
1851, and who flung their gold about recklessly, was too much for the
feelings of the civilians. They deserted in troops.

On January 12, 1852, Lieutenant-Governor Latrobe wrote: "The police in
town and country have almost entirely abandoned duty," and he begged of
the Secretary of State to send military aid. In May, 1852, Sir John
Pakington replied, promising six companies of the Fifty-ninth Regiment
from China, but subsequently decided to send a whole regiment direct
from England. A man-of-war was also to be stationed in Australian
waters. A still more welcome assistance came in the early part of the
year from the Governor of Tasmania, who sent, at Latrobe's earnest
request, a body of two hundred pensioners, who had been serving as
convict guards, and who might be expected to resist those temptations
which, if yielded to, would result in the loss of their pensions. But
all this assistance meant money, and the Government soon fell into sore
straits.

It is true that at first the revenue rose substantially. Comparing the
income for the quarters ending December 31, 1850, and December 31, 1851,
respectively, we find, on general account, an increase of eleven
thousand pounds, or about 30 per cent., and, on the Territorial account,
or Land Fund, an increase of seventy-three thousand pounds, about 100
per cent. Three months later the increase was about 200 per cent. on the
general revenue,