The New South Wales Corps - Grose and Paterson - Hunter Governor of New South Wales - Trading monopolies - System of transportation - The assignment system - Tickets of leave - Political prisoners - Irish rebels.

In the year after the establishment of Sydney a military force was raised in England especially for the new colony. It was called the New South Wales Corps. The First Fleet had been accompanied by marines, and the intention had been that a detachment of this regiment should be stationed permanently at Sydney. But the officers and men disliked the service, and the Government therefore determined to organize a special corps of infantry. The policy was to encourage the members of the corps to settle in New South Wales, and land grants were promised to them as an inducement. A very prominent and occasionally turbulent part was henceforth played by this military force, which, though designed to aid the Government, strove to become its master. Every Governor after Phillip until the corps ceased to exist in 1810 (when the practice of stationing detachments of regular troops in Australia was commenced) had trouble with it. It flouted Governor Hunter, who had to complain that it violated peace and order and defied the law; it insulted Governor King; and it deposed Governor Bligh.

The second Governor of New South Wales, Captain John Hunter, who had commanded the SIRIUS with the First Fleet, was not appointed till more than a year after the departure of Phillip, and did not arrive in Sydney till September 1795. During the interval of nearly three years the government was administered first by Major Francis Grose, and in the last nine months by Captain William Paterson, both officers of the New South Wales Corps. It was a great misfortune that this period of military rule occurred; because in the course of it the colony was brought to degradation by drink, corruption, and general iniquity, which required years to mitigate. Phillip had imposed restrictions on the distribution of spirituous liquors, recognizing the evils which would inevitably follow from the common use of them among a morally weak population. But Grose permitted large quantities of spirits to be imported and to come into the possession of officers and settlers, who freely used them for rewarding the convicts who worked for them. Rum, as spirits of all kinds were called, was a curse and a calamity in Sydney for years to come. Officers profited from the distillation, importation, and sale of it, soldiers and convicts alike consumed large quantities of it; and it bore an evil fruit of disease, crime, outrage, and rebellion.

Grose was particularly tender towards his brother officers, in permitting them to acquire landed estates and to have the services of convict labourers. When Hunter took charge he found that no land had been cleared for public purposes and no public works carried out since Phillip left, nearly the whole of the convict labour having been utilized for the profit of the officers. The Government fed and clothed the convicts, the officers had their labour for nothing, and the Government purchased the commodities produced by it at prices fixed by the same officers.

The officers were also permitted to enjoy a monopoly in the purchase of spirits and other commodities imported for general sale, and pocketed large gains from them. Their military duties and the honour of their uniform were subordinated to sordid avarice, and the entire community was debauched in order that they might grow rich. Maurice Margarot, a political prisoner, was examined before the House of Commons Committee on Transportation on his return to England in 1812. He was asked, 'Do the majority of the officers to whom the Government of the colony is entrusted embark in trade? 'All, to a man,' he replied. 'What is that trade? 'It consists first of all of monopoly, then of extortion; it includes all the necessaries of life which are brought to the colony.' In 1797, said Margarot, a 'combination bond' was entered into by the officers, 'by which they were neither to under-buy nor under-sell the one from the other.' It was the first example of a 'trust' in Australia. The same witness spoke of spirits which had cost 7s. 6d. being sold in this way for 8 pounds per gallon. A letter written by Mrs. John Macarthur explains how the monopoly was managed. 'The officers in the colony, with a few others possessed of money or credit in England, unite together and purchase the cargoes of such vessels as repair to this country from various quarters. Two or more are chosen from the number to bargain for the cargo offered for sale, which is then divided amongst them in proportion to the amount of their subscriptions.'

At the same time as he allowed this trading system to be commenced, Grose suppressed the civil magistracy, and placed the entire administration of justice in the hands of the military men. When Governor Hunter insisted on restoring the justices to their functions, they were subjected to annoyance by the soldiers, and he felt compelled to report to the Secretary of State that 'for these shameful and unpardonable purposes the most improper means which a mischievously fertile imagination, a malicious, restless, and vindictive disposition could invent,' had been used. Grose frankly disliked all in the community whom he could not pamper as soldiers or control as convicts. He spoke testily of having been 'much plagued with the people who become settlers.'