Before entering upon the next stage in the story of the bushrangers, it may be advisable to say something of the vast change which suddenly took place in the conditions in Australia about this time. In 1842-3 the colony of New South Wales was plunged into a financial crisis, about which it is unnecessary to say much here, but from which the colony was only beginning to recover in 1851. Wages were still very low, and numbers of men were out of work. In April, 1851, the news that gold had been discovered at Summerhill Creek, in the Bathurst district, roused something like a ferment in the colony. Men employed in Sydney threw down their tools to "go to the diggings." There was a general exodus from the coast cities and towns to the ranges, then considered far away in the interior. Wages jumped from about one shilling per day for labour to ten or more, meat rose from one penny per pound, for the best cuts, to sixpence. The roads leading to Orange, the Turon, and other early goldfields in New South Wales, were thronged by men, either going to the diggings to seek their fortune, or returning disappointed. In July, 1851, the Port Phillip district of New South Wales was erected into the independent colony of Victoria, and in August the news that gold had been struck in the Ballarat district of the newly-established colony turned the tide of gold-seekers in that direction. The police establishment, with which the new colony started, was merely that of an outlying district of a huge sparsely-populated colony, and was wholly inadequate to the requirements.

There were two gaols in the colony; one at Melbourne, the other at Geelong; neither of them very large. The Geelong gaol, in fact, was little more than a lock-up, and it was only within the past two years that the gaol had been enclosed within a high wall. In 1850 it stood out on the hill, a short distance from the banks of the Barwon River, an ordinary-looking brick building, with the Governor's House and other offices grouped near it, and all opening out directly on the level flat which stretched from the top of the banks of the Barwon River to the hill on which the main portion of the town of Geelong was situated. On the top of this hill, the last building in that direction, in "old Geelong"—as it was called, although it had only been founded about twelve years before—was the court house, and there was no other building along Yarra Street, on the southern side of the hill and across the little flat (a distance altogether of about half-a-mile) until the gaol was reached. The Melbourne gaol stood on what was then the boundary of the city of Melbourne. It was a larger and more imposing building than the Geelong gaol, but still wholly inadequate for the requirements; and therefore one of the first duties of the Legislative Council of the new colony was to provide accommodation for evil doers, who could no longer be sent to the gaols of Sydney to serve out their terms of punishment. This was done by the establishment of "stockades" at Collingwood and Pentridge, both near Melbourne, and the purchase of two old trading vessels, the President and the Success, in September, 1852, to be converted into convict hulks for the safe keeping of the more desperate of the malefactors. Subsequently three other hulks were added to the list, and these were in use for many years after large prisons had been erected at Melbourne, Geelong, Ballarat, Bendigo, and other centres of population.

Looking back from the present time it appears to me that the Colonial Office was guilty of a serious tactical blunder in appointing Mr. Charles Joseph Latrobe, as the first Governor of Victoria. He had been appointed Resident Magistrate, or Superintendent, of the Port Phillip District in 1839; and, during the agitation for the separation of that district from the huge colony of which it was a part, Mr. Latrobe, very naturally perhaps, did all that he could to prevent the inhabitants from gaining their end. As a consequence, he was perhaps the best hated man that has ever lived in Australia. He was usually called "the Governor's poodle," and was denounced in no measured terms by the advocates of separation. When that was carried, and Mr. Latrobe became Lieutenant Governor, his harsh treatment of the diggers nearly drove them into rebellion. This is not the place to give the history of the Ballarat riot, but some reference to it is necessary. A most exorbitant licence fee was imposed on all residents on proclaimed goldfields, and this tax was collected in a most arbitrary and brutal manner. There were no gaols nor lock-ups on the diggings at the time, and men arrested for all sorts of offences—murder, bushranging, stealing, or the non-payment of licence fees—were simply fastened with handcuffs to a bullock chain attached to a tree stump by a huge staple. Later some boxes, made of corrugated iron, were put up as cells and these were known as "the Dutch ovens," or "the sardine boxes," and prisoners confined in them on hot summer nights suffered tortures, and begged to be put "on the chain" as a relief. Mr. Latrobe, therefore, soon came to be as cordially hated by the new comers as he had been by the older inhabitants of the district. But whatever may be said as to the harshness of his treatment of the gold diggers, the efforts he made to check the lawlessness rampant in the colony cannot be too highly commended. He and the Legislative Council organised a fine body of police in a very short time. The horse police were as well-disciplined and mounted as any similar body in any part of the world, but allowing for their efficiency, it would have been impossible for them to repress lawlessness so rapidly and completely as they did, had they not been assisted by the attitude of the general public. I may be wrong perhaps, but it has always appeared to me that the antagonism between the free and the convict elements in the population of which I have already spoken was continued long after the abolition of the convict system, and even passed on to those who landed in the country during the rush to the diggings. There was a general tendency at the time to credit all sorts of misdeeds to the convicts. No doubt, among the enormous crowds which landed in Victoria in the early years of the rush to the diggings, there was a fair admixture of rough and reckless characters who were not convicts, but it was the custom to assume that all crimes were committed by the "old hands," and that any man arrested for any criminal offence had been "sent out." Thus, when Mr. Lachlan M'Lachlan was appointed police magistrate of Bendigo, he merely expressed openly the opinion held by other magistrates, and the public generally, when he declared that nearly all thefts were perpetrated by "old hands." He asserted that he could distinguish a convict from a free man at a glance. He would order the police to make the prisoner walk down the court, and would exclaim: "Turn him round again, sergeant. Ah! I thought so! I can see the marks of the irons on his legs."[37] By which he meant that the man had acquired a sort of limp through wearing irons, and that he could detect it. All such men were sent to gaol for six or twelve months, not so much for the crime or offence with which they stood charged, as because they were ex-convicts. And generally the public endorsed this apparent injustice. "It's a pity we ain't got more magistrates like Bendigo Mac," was an expression frequently heard in all parts of the colony. It is not impossible that the fashion of crediting all crimes and offences to convicts, however unjust it may have been, tended to prevent others from committing crimes. Whether this was so or not, it is certain that the diggers, rough and careless as the majority of them were, steadily set their faces, as a class, against crime, and never hesitated, even during the height of their dispute with the authorities, to hand over to the police any person detected in stealing. Probably they were forced into this attitude in self-defence. The diggings were merely huge camps, everybody living in tents or "houses" made of wooden rafters and uprights, covered with calico or canvas. Even the big hotels and theatres were calico structures. It was so easy for an evil-disposed person to rip open a tent and thrust his hand under the pillow or into any other place where he thought gold might be concealed. But such thefts, although numerous, constituted only a minority of the crimes committed on the goldfields. All round were holes twenty or thirty feet deep, and the paths from one part of the field to another wound in and out between these holes, so that it was dangerous for a stranger in the locality to travel about after dark. In such a place it was so easy to stab a man and throw his body down a hole that the very facilities offered operated as a temptation to murder. Scarcely a day passed without a body being found murdered and rifled, and thus a peculiar sort of morality was developed on the diggings, and the diggers, while resisting the police, jeering at them and showing their hatred of them in every possible way, still assisted them in capturing thieves and other criminals. It was the custom to call public meetings for political and other purposes, by sending men to all the various camps each carrying a tin dish. These heralds would beat their tin dishes and yell, "Roll up! roll up!" Frequently a "roll up" was called for the purpose of organising a party to hunt down thieves or other evil-doers, and very soon the "roll up" carried terror through the ranks of tent thieves and other robbers. Sometimes the delinquent when caught was cuffed and beaten and ordered off the diggings on pain of death, but, as a rule, he was marched to the police camp, popularly known as "The Camp," and handed over for trial. It was perhaps because of this attitude of the diggers, that "Lynch law" did not become an institution in Victoria, as it had in California. On more than one occasion, it was proposed that thieves, robbers, and murderers should be summarily dealt with by their captors, but such resolutions were not endorsed at the "rolls up"; although, on more than one occasion, it was said that if the Government could not protect the diggers from bushrangers, the diggers would have to protect themselves. Some of the old names, now rapidly disappearing, record the character which the neighbourhood once bore. Thus "Murderer's Flat," the old name of a portion of the Mount Alexander Goldfield, is almost forgotten. The flat is now a portion of the pretty little mining and agricultural town of Castlemaine. It was the custom here in the "roaring fifties," for the diggers to fire off their guns and pistols every night after sundown, and ostentatiously reload them, as a caution that any person seen prowling round the tents during the night would be shot without further notice. In many of the outlying gullies on the Bendigo and Ballarat Goldfields the same ceremony was performed nightly. Beyond the limits of the goldfields the roads were infested by footpads and bushrangers, who hated the diggers for their antagonism to their class. To these the digger was fair game. It was popularly supposed that these bushrangers were all convicts from "Van Diemen's Land," hence they were known as "Van Demonians," "Derwenters" from the River Derwent, and "Tother siders." The newspapers were full of references to their doings. The Geelong Advertiser of June 2nd, 1851, warned the public that "large numbers of men—half bushranger, half gold-seeker—are travelling along the roads, especially the Sydney road, robbing all who are unprotected." These were said to be Van Demonians who had landed in Geelong or Melbourne, and who were making their way to the goldfields of New South Wales. In the same month the Melbourne Herald published several articles calling the attention of the authorities to the large "influx of Van Diemen's Land expirees who are thronging into Port Phillip." These "villains," it was said, were travelling along all the roads which led to the diggings on the Sydney side, and lived by plundering honest travellers. On June 23rd the mail coach was bailed up at Bruce's Creek, between Portland and Geelong. The coach, with three passengers on board, was going down the hill to the crossing-place, when two men stepped from behind gum trees, presented their pistols, and cried "Bail up." The driver, William Freere, instead of complying, began to flog his horses, but before they could respond their heads were seized by one of the bushrangers, while the other put his pistol to Freere's head, and threatened to blow his brains out. The coach was taken some distance off the road, and its occupants were tied to trees. The robbers went very leisurely through the letters, and when all that was of value had been abstracted one of the bushrangers took a saddle and bridle belonging to one of the passengers (Mr. Thomas Gibson) and set it aside with the remark, "Ah, this is just what I wanted." This bushranger was dressed "in a black suit of fashionable cut, and wore black kid gloves." He was afterwards identified as Owen Suffolk, while his companion was Christopher Farrell. Suffolk took one of the coach-horses, put the saddle and bridle on, and mounted. Farrell jumped on the other horse barebacked. The tied men begged hard to be let loose, offering to swear that they would not give information to the police, or move from the spot until their captors were away, but their supplications were only laughed at. The road was at that time but little frequented, and the next mail, which might possibly be the first vehicle to pass, would not come for a week. Moreover, they were out of sight of the road. The struggle to get free was therefore a struggle for life, and it was a severe one. Mr. Gibson was the first to get one hand loose. After this the rest was comparatively easy. In less than an hour they were all free, and they walked straight to the township at Bruce's Creek to tell the police. The robbers were caught in Geelong a day or two later. Suffolk was strolling along the beach near the wharf, and Farrell was found in a boarding-house not far away. They were sentenced to ten years' penal servitude, the first three in irons.

James Mason and John Browne, two diggers, were sitting at their camp at Bendigo having supper, when a man named William Scott passed along, going towards the "township." They invited him to "sit down and have a feed," as he looked tired, and he did so. But while eating he slipped his hand under the edge of the tent and took out a bag containing 110 ounces of gold. The gold was missed before he was out of sight, and he was followed immediately and captured. He was taken to "the camp," and subsequently sent to gaol for five years.

On January 28, 1852, the Melbourne Herald reported that "a gang of Vandemonians have kept the road between Bendigo and Eaglehawk Gully for three days, robbing all who passed." The police were sent out and the gang was broken up. One was shot and three others traced to Halliday's Inn at Kyneton, where they were captured. They had thirty-three pounds weight of gold in their possession, and were taken on to Melbourne for trial.

Such reports were so frequent that the Legislative Council was compelled to take action, and as a consequence the Act known as the Criminals' Influx Prevention Act (18 Vic., No. 3) was passed in November. This Act was specially designed to keep ex-convicts out of the colony. It was impossible to prevent those from New South Wales from crossing the Murray River, but it no doubt checked the influx of the more desperate criminals from Van Diemen's Land, where transportation was continued for many years after it had ceased to New South Wales. But although the Act prevented ex-convicts from landing at Victorian ports it could not prevent them landing at Sydney or Adelaide and walking overland to the Victorian diggings. In spite of this, however, the Act was undoubtedly very efficacious in checking the landing of criminally-minded persons. There were, however, so many in the colony previously to the passing of the Act that the police had plenty of employment in hunting them down.

On February 6th, Corporal Harvey, of the mounted police, was searching some boxes at the Police Barracks, Buninyong, to ascertain whether they contained gold. A man named Goldman threatened to shoot him if he touched his box. The trooper simply replied "I must do my duty," and opened the box. Goldman shot him at once. This crime was a purposeless one. The trooper had been ordered to remove gold from all boxes left at the station so that it might be sent down to Geelong by escort. The only excuse which can be made for Goldman is that the diggers were very sensitive where their gold was concerned and were also very ready to protect it even at the risk of murder. But the boxes were left there in charge of the police, and any man who objected to his box being searched had no right to take it there. However, Goldman was convicted of murder and hung.

On February 23rd, Elliott Aitchison, a squatter, was robbed near Buninyong. The robber took horse, saddle, bridle, saddle-bags, watch, a bill of exchange for £30, and some money. The bushranger was identified as a man named Edward Melville, who had been working for a neighbouring squatter, Mr. Winter, of Winter's Flat, and was well known in the district. A reward of £30 was offered for his apprehension.

The ship Nelson arrived at Geelong from London in March, 1852, where she landed her passengers and cargo and took on board some cargo for her return voyage. She was then taken round to Hobson's Bay to fill up. On the night of April 1st she was lying off Liardet's Beach, near where the South Melbourne pier now stands. There were on board Mr. Draper, the mate in charge, Mr. Davis, second officer of the Royal George lying at anchor near, three seamen, three passengers, and the cook. At about two a.m. they were roused by loud calls, and as each one came out of his cabin to ascertain what the row was about he was seized and lashed to the bulwarks. When all had been secured the robber who appeared to be leader untied Mr. Draper and ordered him to show where the gold was. The mate refused. The robber fired and wounded him in the side. He then threatened to shoot him dead next time he refused. Another of the gang prodded Mr. Draper behind with a sword, and, realising that resistance was useless, he led the way to the lazarette. The door was soon broken down, and twenty-three boxes containing 8183 oz. of gold, valued at about £25,000, were taken out and carried on deck. "I say, mates," exclaimed the leader, "this is the best—— diggings we've seen yet." The boxes were lowered over the vessel's side into boats, and then the men tied to the bulwarks were unloosed, their hands tied behind them, and they were marched into the lazarette. The entrance was closed up with the broken boards nailed across. When the stevedore and his men arrived some hours later to go on with their work the prisoners in the lazarette were released, and information was given to the police. The robbers were said to have numbered about twenty. A search proved that two of Mr. Liardet's boats had been removed from their moorings. They were found far away along the beach, and it was conjectured that these boats had been used by the robbers. A reward was offered by the Government of £250 for the capture and conviction of the robbers, and this was supplemented by a further reward of £500 offered by Messrs. Jackson, Rae & Co., the consigners of the gold. Within a few days John James, alias Johnston, was arrested in Melbourne, and shortly afterwards James Morgan and James Duncan were found at the Ocean Child Inn, Williamstown. They were in bed, and when the police entered the room Morgan exclaimed: "If we'd known you was—— traps we'd a' blown your —— brains out." When taken to the lock-up he said: "We may be sentenced, but we'll live to dance on your —— grave, and have 2000 a nob to ride in our carriages." At the trial it was said that they had been concerned in several highway robberies on the Keilor Plains and in the Black Forest, but these cases were not gone into. They were convicted of having stolen the gold from the Nelson, and sentenced to fifteen years' hard labour, the first three in irons.