the capital city of the colony of New South Wales, situated on the southern side of the harbour of Port Jackson, about 7 miles from the entrance to the port; S. Lat. 33° 52', E. Long. 151° 12'. It was founded on the 26th January 1788, and named from Viscount Sydney, at that time secretary for the colonies.

Sydney is distinguished as the earliest of the Australian settlements, and was commenced as a convict establishment under the transportation system of the Imperial Government. The resources at command for that system in North America having been gradually cut off, first by a growing preference with the colonists for negro labour, and at last by the separation of the United States, the British authorities turned attention elsewhere, and the reports of Captain Cook directed them to New South Wales. "The first fleet," as it has been called, consisting of 11 vessels, left for the antipodes on 13th May 1787, and arrived at Botany Bay, the intended destination, on the 18th January. But this place proving quite unsuitable, the whole expedition was promptly removed to Port Jackson, a few miles to the northward. This port, one of the finest harbours in the world, was previously thought to be only a boat harbour, and was called after one of Cook's seamen, who had first discovered it. The party, consisting of 1030 persons, including 565 male and 192 female convicts, with 200 soldiers, and some women and children, was landed at Sydney Cove, one of the many beautiful inlets of the harbour, and there they founded the present city of Sydney, with Captain Arthur Phillips, R.N., at their head, as the first governor of the new penal colony.

For a time at first the town was irregularly constructed, and comprised very picturesque and humble edifices, some of which have lingered into present times. The present plan was laid out in 1809. The city is surrounded on three sides by water: to the north, the main harbour called the Stream; to the east, Woolloomooloo Bay; and to the west, Darling Harbour. It is built partly on high ground, and partly along a hollow, traversed by the principal thoroughfare, George Street. The basis is sandstone, which affords a valuable building material, that is plentifully made use of both in building and paving the town. The soil is light and sterile—a characteristic feature that prevails far beyond the limits of Sydney. On the other hand, the water or harbour scenery is most diversified and beautiful, with numerous inlets, and rocky promontories covered with the natural evergreen vegetation, and thickly interspersed with houses and gardens belonging to the expanding suburbs of the capital.

The harbour is quite landlocked; and large ships may approach close to or even touch the rocky shores on which the town is built. These natural advantages, have given undisputed pre-eminence to Sydney as the great commercial emporium of the colony; and nature has been powerfully seconded by the system of extensive wharf accommodation along Sydney Cove and Darling Harbour. A dry dock, capable of accommodating the largest merchantman, has also been constructed at Waterview Bay, one mile distant from Sydney; and there are, besides, two patent slips at Darling Harbour, the larger of which can take vessels of from 1500 to 2000 tons. The town and shipping are protected by five forts or batteries on various commanding situations, including the principal ones of Fort Macquari, Dawes' Battery, and the more recent and imposing erections at Kirribilli Point on the north shore, and Fort Denison on what was originally called Pinchgut Island. There is a large and admirably constructed dry-dock in private hands, on Water View Bay, and another constructed by the government on Cockatoo Island, capable of accommodating the largest class of ocean steamers. There is also a very fine patent slip at Balmain in the hands of a company. The customs-tariff is in general liberally framed, and upon principles of free trade. The duties are levied upon a few principal articles of import, chiefly spirits, wines, and tobacco. The duty on the latter, however, operates protectively upon an inferior colonial production. There is an export duty on gold of 2s. 6d. per oz., as in the adjacent colony of Victoria, the governments of both places having found difficulty in securing by other means a payment for the use of the auriferous soil. The scale of commerce and shipping is large, and has been greatly augmented since the gold discoveries in 1851. The colonial imports in 1850 were Ll,333,413; the exports, Ll,357,784. In 1858 they were—imports, L6,058,366; exports, L4,186,277. The apparent discrepancy in the exports arises from the large transit of live stock across the border to Victoria, no account of which can be taken. These figures are for the whole colony of New South Wales, including the Moreton Bay District, which has just been created a separate colony; but nearly the entire of this large commerce is connected with the central harbour of Sydney. The chief articles of export are wool and gold, the latter in annual value above Ll,000,000, having considerably increased since 1858, and the former about one-third to one-fourth more. The shipping inwards for 1858 was 348,984 tons, and outwards 366,825 tons. The colonial revenue for 1858 was Ll,456,451, exclusive of loans for railways, &c., and for 1859 it was Ll,540,550. The public debt on 31st December 1858 was L2,797,090. The great railway schemes which are being carried out by the colonial government, will soon much increase this amount. Three great railway lines have been projected from Sydney, to the north, to the west, and to the south-west. These have all been commenced, and of the last, proceeding via Paramatta towards Goulburn, and intended eventually to reach the Victoria frontier, 34 miles are already finished and in operation. There is telegraphic communication throughout great part of the colony, and particularly to the south-west, where, at Albury on the frontier, 360 miles from Sydney, the telegraph lines from Victoria are united, and thus connect Sydney with that colony, and with South Australia and Tasmania. Already the grand project of telegraphic connection with Europe has been seriously entertained at Sydney, and seems likely to be soon carried out, now that there is almost a continuous line from England via Kurachee and Ceylon to the eastern part of Java.

The population of Sydney by the last census in 1856 was 53,118, consisting of 26,220 males, and 26,898 females, while that of the entire colony was, on the same occasion, 268,737. Ten years previously that of the city was 37,203. In 1858, the population of the two electoral districts in which Sydney is divided, was estimated at 53,358, exclusive of the populous and now connected suburbs. Sydney and these numerous offshoots of Paddington, the Glebe, Newtown, St Leonards, &c., may now contain about 75,000 souls. So considerable a place, with a proportionally large export and import commerce, presents a very active scene of life and business. Omnibuses constantly traverse town and suburbs, and many vehicles are despatched from Sydney in all interior directions for the passenger and postal service, while the towns on the sea-coast are connected by steam communication, extending south to Melbourne and Hobart Town, and north to Moreton Bay, and the newly discovered gold region behind Port Curtis and Rockhampton. The oft interrupted steam postal communication with Britain seems at length permanently settled. The present line is via Suez and Melbourne, occupying about 50 days to Sydney, when the short and fast route through France is availed of. This postal service has hitherto been monthly, but it is expected presently to be fortnightly, by arrangement with the contracting steam company (the Peninsular and Oriental), and it is partly with this object in view, partly to avail of the recent telegraphic extensions to Ceylon, that an alteration has just been effected (March 1860), by which Galle has been made the place of call instead of Mauritius. Sydney, however, as standing at the extreme of this postal line, the last place of arrival and the first of departure, and exposed to frequent disappointment in receipt of mails, has of late been dissatisfied with this route, and in conjunction with the New Zealand settlements, which are still more unfavourably situated, has been endeavouring to establish a second and alternate line via Panama.

In 1843, Sydney, in common with Melbourne and some other Australian towns, was formed into a municipality under a mayor and corporation. The proceedings of this body having rendered it unpopular, it was abolished some years ago; but the institution has since been restored, and has made itself useful in effecting improvements in sanitary and other departments. The corporation revenues for 1858 amounted to L55,451, including a government grant of L10,000, but exclusive of loans; the expenditure was L66,862. In religious affairs, Sydney is the residence of an Anglican bishop, and a Roman Catholic archbishop. The Australian museum, commenced in 1838 and incorporated in 1853, comprises a good illustration of Australian natural history. The University was founded in 1850, and the same year established by act of council. Its degrees now take rank with those of similar institutions in Britain. In 1858 there were 33 matriculated students. The city has long been lighted with gas. It is now well supplied with water, and a great system of drainage is in progress. The main thoroughfares of Pitt Street and George Street have a carriage-way of 60 feet in breadth; and there are now many handsome shops, churches, and public and private edifices. There are 8 banks, most of which have large capitals, and many branch establishments; and the town is varied on its outskirts by several parks, by a botanic garden, and by the domain surrounding a handsome and spacious Government House.

Shortly after the gold discoveries, the establishment in Sydney of a branch of the royal mint was petitioned Sydney, for, and with success. This institution came into operation in May 1855. The coinage is limited to gold, the sovereigns and half-sovereigns to be of equal weight and purity to those of imperial coinage. There has not yet, however, been conceded to it the privilege of an imperial coinage—a circumstance that materially diminishes the advantage of the local mint, and is of constant inconvenience in the commercial relations between Australia and Britain. Meanwhile the adjacent colonies have accepted the coin as legal tender, although not without demur and delay, particularly in the case of Victoria, which objected alike to the invidious non-imperial distinction, and to the fact of the mint having been hastily placed at Sydney, while nearly all the gold was at Melbourne. For a time at first, therefore, the Sydney mint threatened to prove a serious loss to the colony. The works cost £50,000, and the annual maintenance £12,000, while the income fell short of the latter sum. There is now, however, an excess of income, but the colony is prohibited by imperial regulation from making the institution a source of profit. The area of the legal tender has been extended to several colonies, Mauritius, Ceylon, and Hong-Kong, which are still imperially administered. Those colonies having free governments to decide in the matter for themselves. The business of the Sydney mint is again threatened by a recent demand of the legislature at Melbourne for a mint there also; and if, as seems reasonable, the imperial privilege will soon be conceded to Australian coin (the branch mint operations being all under imperial appointees, and subjected to regular imperial test), there is yet further diminution in extent of operations in prospect, because great part of the business hitherto can be regarded as merely the substituting of colonial for imperial coin, in consequence of the latter having more value outside Australia than the former, and being in consequence always preferably taken for export.

The 26th of January is now a distinguished anniversary, which has of late been somewhat regularly celebrated, and with due eclat, in London, where, from the facilities of intercommunication and affection for the parent country, very many colonists can now always be mustered. It is, however, no longer the celebration of a penal settlement, but of a flourishing colony, which has long been entirely self-supporting, and is now possessed of a free constitutional government. The battle of the transition from "convictism" is not altogether a pleasing retrospect. The cessation of transportation to New South Wales, and the removal of the stigma of its being a penal settlement, were but reluctantly conceded by the imperial and colonial authorities, and even by an influential party of colonists under the past regime, who, as employers of labour, found more profit and less annoyance from the assigned convict than from the free immigrants. The league against the transportation system, inaugurated in 1851 at Melbourne, and established also at Sydney, was eventually victorious, and but for the partial revival of the system at Western Australia, these colonies might now have been entirely freed, at all events, from any further criminal admixture, and have been in a fair and rapid way for recovering from the social damage already sustained. As it is, however, the progress has been very marked in the relative diminution of crime, and to the residents themselves, it is even more evident in the general social aspect. A prosperous colony of the British people, in a temperate latitude, should be a scene comparatively destitute of heinous crime. These colonies, with the widely spread and lingering elements of their original character, cannot assume this position; but the following comparative return of the convictions at the Supreme Court of Sydney gives a good assurance of progressive improvement, even allowing for the effects of irregularity and extravagance that characterized the earlier years of the gold discovery, 1851 to 1853. In 1853, the convictions were 604; in 1854, 637; in 1855, 526; in 1856, 461; in 1857, 395; in 1858, 415.

Sydney is the seat of the Governor-General of the Australian settlements. The supremacy, however, which the Governor of New South Wales legally enjoys with reference to the other colonies has long been, in consonance with understanding, a dead letter, and exists only for certain possible emergencies. The colonial legislature assembles in a handsome edifice of the capital, and consists of a council, at present of crown nomination, and consisting of forty members, besides the president, and an assembly of seventy-six members, including the speaker, elected by the colonists. The former body, the Upper Chamber, or House of Lords, as it were, will, with the view of giving it more independence, probably soon be made elective as well as the other, in obedience to prevailing public opinion, and in harmony with example in the other colonies. The political tendencies, and the religious as well, since self-government has permitted their free development, are all towards a democratic equality; universal suffrage, the ballot, no property qualification, are principles either already adopted or on the eve of being so. The good wages and independent position of all classes, and the absence of local traditional inequalities, render these results natural, suitable, apparently, and probably irresistible. It is pleasant to add, that neither this conceded freedom of political action, nor the tendency to this extreme democratic departure from the home model, have affected the loyal sentiments of the colony. The new constitution was proclaimed in November 1855; but the colony ever since, although actively contentious enough as regards its own political parties, has displayed only an increased deference and loyalty to the parent government, the natural result, indeed, of its having secured at length that free political condition which it had long desired and contended for.