1853, work began on the Yan Yean Reservoir to provide water for Melbourne. Piped water started to flow in 1857. Victoria's population reached 400,000 in 1857 and 500,000 in 1860. As the alluvial gold became scarce, many of the miners moved to Melbourne or became unemployed in cities such as Ballarat and Bendigo. Significant pressure was placed on the government to make available lands in rural Victoria for small plot farming. In 1857 a Land Convention was held in Melbourne.
The accelerated population growth and the enormous wealth of the goldfields fuelled a high growth economy lasting forty years, which ushered in the era known as Marvellous Melbourne. The city spread eastwards and northwards over the surrounding flat grasslands, and southwards down the eastern shore of Port Phillip. Wealthy new suburbs were established. These included South Yarra, Toorak, and Kew while the working classes settled in Richmond, Collingwood and Fitzroy.
The influx of educated gold seekers from England led to rapid growth of schools, churches, learned societies, libraries and art galleries. The first telegraph line in Australia was erected between Melbourne and Williamstown in 1853. The first railway in Australia was built in Melbourne in 1854. Also, in 1854, the government offered four religious groups land on which to build schools. These included the Wesleyan Methodist Church and the Anglican Church and resulted in Wesley College and Melbourne Grammar School being built in St Kilda Road a few years later. The University of Melbourne was founded in 1855 and the State Library of Victoria in 1856. The foundation stone of Saint Patrick’s Cathedral was laid in 1858 and that of Saint Paul’s Cathedral in 1880. The Philosophical Institute of Victoria received a Royal Charter in 1859 and became the Royal Society of Victoria. In 1860 this Society assembled Victoria’s only organised attempt at inland exploration, the Bourke and Wills expedition.
In December 1854, discontent with the licensing system on the goldfields led to the rising at the Eureka Stockade; one of only two armed rebellions in Australian history (the other being the Castle Hill convict Rebellion of 1804).
In November 1856, Victoria developed a constitution in 1857 a parliament was formed.
Parliament House was known for its magnificent architecture.
The boom fuelled by gold and wool lasted through the 1860s and '70s. Victoria suffered from an acute labour shortage despite its steady influx of migrants, and this pushed up wages until they were the highest in the world. Victoria was known as the working man's paradise in these years.
Melbourne November 2, 1856
The three Englishmen settled into their rooms at Macs. They ate their first meal in Melbourne at the hotel’s café, where they all chose lamb cutlets with potato and vegetables.
The next day the three friends went their separate ways, agreeing to meet up again at 5 pm.
Mathew made his way to the top end of Bourke Street where he intended to investigate what hotels were available for sale in Ballarat. The offices he sought were Morgan & Davey Real Estate Agents.
He discovered their offices at 134 Bourke on the second floor. He entered the foyer where a young woman was busy filling out an official looking form. She ceased her writing and asked Mathew how she could help.
‘I believe Mr Morgan is expecting me; my name is Mathew Abernethy.’
‘Oh, I see. Please take a seat, Mr Abernethy. I’ll inform Mr Morgan of your presence.’
Mathew only had to wait five minutes before a short, stocky man in his fifties appeared.
‘Mr Abernethy, I’m pleased to meet you. I’m Horace Morgan. Please come into my office.’
The two Englishmen entered the small but tastefully decorated office and Mathew was offered a chair in front of the rosewood desk.
‘Now Mr Abernethy, I believe you are interested in purchasing a hotel in Ballarat. Is that correct?’
‘Please call me Mathew, and yes, I consider it would be a good investment.’
‘Call me Horace,’ responded his host. ‘Yes, it certainly would be as long as you chose the right one.’
‘Do you have any on your books at the moment, Horace?’
‘I do, of varying sizes, but it does depend on how much you wish to invest.’
‘I haven’t a set figure in my mind. I’d rather examine what listings you have and then make a decision.’
The realtor reached for a large leather-bound book, opened it and began to show the young investor the hotels he had listed. Some were in the main street; others not. There were five in all.
One particular hotel took Mathew’s attention.
‘This looks like a splendid establishment Horace why is it for sale?’
Horace responded, ‘The publican has a desire to return to England as apparently his father is in poor health.’
‘May I examine the books?’
‘Yes, certainly I have a copy of them here.’
Mathew scanned the financials. All looked in order and the profit figures were more than acceptable.
‘May I enquire the purchase price?’
‘He is asking £10,000.’
‘Will he consider an offer?’
‘Possibly; what figure did you have in mind?’
‘I have £8,500.’
‘I think it would be worth me submitting your offer, Mathew. There’s no guarantee he will accept it, but we can only try.’
The two men shook hands with Horace assuring Mathew he would contact him at Mac’s Hotel when he received an answer from the current owner of the hotel on offer.
Mathew returned to his lodgings where he lay on his bed and imagined himself as the proud owner of the Golden Nugget Hotel. He decided not to mention his impending purchase to his two friends until contracts were exchanged.
George also headed for central Melbourne where he hoped to purchase the equipment needed to work a gold stake close to Ballarat.
He entered Wilson & Son, a large general store in Elizabeth Street. It stocked everything he thought he would need to become a successful gold miner.
He noticed a familiar face in the store but couldn’t place
