while the Territorial revenue was about the same. But
the latter fact may be accounted for by the transferrence of the fees
for gold licenses to the general revenue. It is more important, however,
to notice that, though the revenue was rising, expenses were increasing
still faster. Not only had the staff to be doubled, or trebled, at a
very large increase of pay, but government contracts for public
buildings, printing, stores, fittings, and other necessaries could be
placed, if at all, only at extravagantly high prices. "No tenders can be
obtained for supplies of boots and shoes; orders have been sent to
neighboring colonies for them. Old furniture sells at about 75 per cent.
advance on the former prices of new; scarcely any mechanics will work."
Latrobe estimated the deficit in the revenue of the year 1853 as nearly
four hundred thousand pounds, notwithstanding that he reckoned the whole
gold revenue of six hundred thousand pounds as available for general
expenses.

In his anxiety the Lieutenant-Governor had at first (December, 1851)
proposed to double the license fee of thirty shillings a month; but the
proposal had provoked such a storm of opposition that he withdrew it.
The revenue from licenses was the source of much contention. The
Government alleged that it was not taxation, but rent, of Crown lands,
and at first devoted it exclusively to the service of the gold-fields.
The diggers denounced it as taxation without representation; and the
Legislative Council, almost necessarily in opposition to the Government
while the latter was administered by nominees of the Colonial Office,
refused to make up deficiencies out of the general revenue. Thus the
Lieutenant-Governor was placed between two fires. If he enforced the
license fees he angered what was rapidly becoming the largest part of
the population; if he relinquished them, he left himself without means
to carry on the government of the gold-fields.

From this dilemma he was saved by the receipt of a general permission
from the Colonial Office, toward the close of 1852, to deal with the
gold revenue in the same manner as ordinary revenue. By placing this
fund at the disposal of the Colonial Legislature, the Home Government
not only removed a great grievance and relieved the hands of the
Lieutenant-Governor from the shackles previously laid upon them by the
Colonial Office, but it took a substantial step toward the end that was
now acknowledged on all sides to be t