On reaching the offing Lieutenant Oxley embarked in the Lady Nelson to return to Port Jackson, and soon afterwards the two vessels parted company.

In consequence of the report made by Lieutenant Oxley to the Governor upon the result of the expedition, an establishment has been since formed at this harbour; which at present is used only as a penal settlement: hitherto no settlers have been permitted to take their grants at Port Macquarie; but when this is allowed it will, from the superiority of its climate and the great extent of fine country in the interior, become a very important and valuable dependency of the colony of New South Wales.

The natural productions of this place are, in a great measure, similar to those of the neighbourhood of Port Jackson; but many plants were found which are not known in the colony; and as these grow in all parts within the tropic, the climate of Port Macquarie may naturally be suspected to be favourable to the cotton-plant and the sugar-cane, neither of which have yet been cultivated to the southward: among these plants, we found the Pandanus pedunculatus, which Mr. Brown found in the Gulf of Carpentaria, and many other parts within the tropic, in Captain Flinders' voyage. The face of the hill on the south side of the entrance possesses some good soil; and at the time of our visit* was covered with a profusion of herbage, and studded with groups of banksia, which the colonists call the honeysuckle; the wood of which is useful in ship-building on account of the crooked growth of its stem.

(*Footnote. It is on this hill that the penal settlement of Port Macquarie is now built, the situation having been selected at the recommendation of Lieutenant Oxley. It was settled by Captain Allman of the 48th regiment in the early part of the year 1821.)

The banks of the river on both sides were thickly wooded; in most parts the country is open and grassy and is profusely timbered with the varieties of eucalyptus that are common at Port Jackson. There is however a great extent of brushland in which the soil is exceedingly rich, and in which the trees grow to a large size; these, being covered with parasitical plants and creepers of gigantic size, render the forest almost impervious: it is in these brushes that the rosewood and cedar-trees grow, and also the fig-tree before alluded to; this last tree is of immense size and is remarkable for having its roots protruding from the base of the stem, like huge buttresses, to the distance of several yards.

The natives are numerous, but they appear to depend more upon hunting than the sea for their subsistence. This I judged from the very inferior state of their canoes which are very much less ingeniously formed than even the frail ones of the Port Jackson natives; being merely sheets of bark with the ends slightly gathered up to form a shallow concavity, in which they stand and propel them by means of poles. Their huts are more substantially constructed and more useful as dwellings than any to the southward, and will contain eight or ten persons; while those to the southward are seldom large enough to hold three; they are arched over and form a dome with the opening on the land side; so that they are screened from the cold sea-winds, which, unless they blow in the character of the sea-breeze, are generally accompanied by rain. Kangaroos are very numerous, and from their traces appeared of large size; but we saw neither emus nor native dogs.

As a port this place will never be the resort of vessels of larger burthen than 100 tons, there not being more than ten feet water on the bar; which on account of the swell will not admit vessels of a greater draught than nine feet: this is a great drawback upon its prosperity; but the small coasting vessels from Sydney will be sufficiently large for the purposes of conveying produce to Port Jackson. It cannot long remain as a penal establishment for its utility in that respect is already lost, since the convicts find their way back to the colony as soon as an opportunity offers of escaping; and then, for fear of detection, remain concealed in its outskirts, and are necessarily driven to plunder and rob for subsistence. A very great advantage attending the settling of this part is its free communication with the interior, and with that vast space of fine country situated between Lieutenant Oxley's Track on the parallel of 30 degrees, and Bathurst. This region has lately (1823) been travelled over by my indefatigable friend Mr. Cunningham and found to possess a large portion of excellent soil and rich pasturage; it contains altogether at least twelve millions of acres in which it would be difficult to discover a bad tract of country of any extent; but as one-fourth part is the general calculation in the colony for waste land, nine millions of the richest country will be left for future colonization: many years however must elapse before it can be occupied.

The description of the interior of New South Wales is so foreign to my object, and so irrelevant to the subject before me that I must entreat the indulgence of my reader for this digression; and return to the Mermaid, already described as having left the port and parted company with the Lady Nelson, conveying my friend Lieutenant Oxley to Port Jackson, and leaving us to resume our voyage.

As soon as we had obtained an offing the wind freshened up to a strong breeze from the westward, attended with squally and unfavourable weather; but we were enabled to make some useful observations upon the coastline as far as the next point to the southward of Smoky Cape; when night obliged us to steer more off shore.

The country behind the beach was lined with natives' fires which were kindled as we passed to attract our notice. To the southward of Smoky Cape the land is very low and probably occupied by large lagoons.