On the 14th of July four transports, under the command of Lieutenant Shortland, sailed for England; they intended going to the northward, and passing through the streights of Macassar and Sunda, the season being too early either to attempt going round Van Diemen's land, and to endeavour to get to the westward by that tract, or to go to the eastward by Cape Horn.

The 12th of August being the birth-day of His Royal Highness the Prince of Wales, a salute of 21 guns was fired from the Sirius and Supply, and the officers of the settlement and ships dined with the governor, as on His Majesty's birth-day.

We began at this time to take equal altitudes for ascertaining the exact rate of the time-keeper. On the 17th, the governor directed two boats from the Sirius, with a proper officer in each, to go up the harbour; one to take the north, the other the south side; they were to enter every cove in their way up, in order to ascertain, as exactly as possible, the number of canoes and natives within the harbour of Port Jackson; for the same purpose, two other boats went down the harbour; in one of which the governor went, and I proceeded in the other; in the lower or north part of the harbour there was a considerable number of canoes, some of which were then employed in catching fish.

Upon my going round the coves, they all left their work and pushed with great precipitation for the land, which convinced me that they were women who were thus employed; as they had always shown a desire, as much as possible, to avoid us. I did every thing in my power to prevent their being alarmed, or in any respect uneasy, by keeping at a distance from them, and making every friendly signal I could, but to no purpose; for although there was no other boat in company, they did not seem disposed to trust us near them: there were many men upon the shore, who spoke to us in their usual familiar and chearful manner, and invited us with much apparent earnestness and friendship to come on shore, which, however, I declined, in order to prosecute the business I was engaged in; although I own I thought the counting them from the boat was a very uncertain method of coming at their numbers.

It blew fresh, and there was so much surf on shore, that it was impossible to land where the people stood, without the danger of hurting the boat, otherwise it is probable that I, together with Lieutenant George Johnston, of the marines, who was in the boat with me, should have landed: we went as near as possible to the shore, I believe within twenty yards, and whilst in friendly conversation with them, and lying upon our oars, we observed one of them place his lance upon the throwing-stick, but had no idea that he meant to throw it amongst us, after so friendly an invitation as we had received from them to land: but I was now convinced, that they only wanted us within their reach, no doubt from an opinion that we had no fire arms, as they did not appear: as soon as they thought that they could throw it with effect, a lance was discharged, which passed about six feet over our heads; I saw the lance in the air, and immediately snatched up my gun, which, as they run off the moment they had shown their hostile intention, I was determined to discharge amongst them, and should probably have killed one of their number, if my gun had not missed fire. Mr. Johnston, upon my gun having missed, immediately discharged his into the bushes in which they had sheltered themselves from our sight; but as it was charged only with small shot, I think it could not have hurt any of them.

What reason they could have had for this treacherous kind of conduct, I am wholly at a loss to guess, for nothing hostile or mischievous had appeared on our part; on the contrary, the most friendly disposition had been manifested in every thing we said or did; even when their women took the alarm upon our approach, I spoke to them, and made such signs of friendship as we judged they would understand, and went round at a distance to prevent their apprehension of any insult. It was perhaps fortunate that my gun did not go off; as I was so displeased at their treachery, that it is highly probable I might have shot one of them.

On comparing the accounts, which were taken by the different boats employed upon this business, it appeared that we had seen--Canoes 67--men 94--women 34--children 9,--which is by no means a just account of the numbers who, at that time, lived in and about this harbour; for I have since seen in one part of the harbour more than that number.

On the 27th, the Supply tender arrived from Norfolk Island, where she had been with a quantity of provisions and stores for that settlement; she brought the melancholy account of the loss of Mr. James Cunningham, and four others, who were drowned in the surf, by their boat being overset in landing the stores from the Supply; so exceedingly difficult of access is the shore of that island, from an almost continual surf breaking on a reef which encompasses the coast on that part where the settlement is formed.

In this month a report prevailed in the settlement, which seemed at first to gain some credit:--It was, that one Dailey, a convict, had discovered a piece of ground, wherein he had found a considerable quantity of a yellow coloured ore, which, upon its being tried, appeared to have a certain proportion of gold in it; at this time the governor happened to be absent on a short excursion into the country, to the northward: the report having been made to the lieutenant-governor, he, of course, examined the man, who had made the discovery, and who told his story with so much plausibility, that it was not doubted but an ore of some kind had been sound.

Dailey was interrogated as to the place, but this he refused to give any information of until the return of the governor, to whom he would give a full account of the discovery, provided he would grant him what the discoverer considered as but a small compensation for so valuable an acquisition; this reward was, (as there were ships upon the point of sailing) his own and a particular woman convict's enlargement, and a passage in one of the ships to England, together with a specified sum of money, which I do not now recollect. The lieutenant-governor insisted, that as he had already mentioned the discovery he had made, he should also show what part of the country it was in, otherwise he might expect punishment, for daring to impose upon those officers to whom he had related this business: the fear of punishment disposed him to incline a little, though apparently with much reluctance; he proposed to the lieutenant-governor, that an officer should be sent down the harbour with him, for the mine, which, he said, was in the lower part of the harbour, and near the sea shore, and he would show the place to the officer.