The revenue from licenses was the source of much contention. The
Government alleged that it was not taxation, but rent, of Crown lands,
and at first devoted it exclusively to the service of the gold-fields.
The diggers denounced it as taxation without representation; and the
Legislative Council, almost necessarily in opposition to the Government
while the latter was administered by nominees of the Colonial Office,
refused to make up deficiencies out of the general revenue. Thus the
Lieutenant-Governor was placed between two fires. If he enforced the
license fees he angered what was rapidly becoming the largest part of
the population; if he relinquished them, he left himself without means
to carry on the government of the gold-fields.
From this dilemma he was saved by the receipt of a general permission
from the Colonial Office, toward the close of 1852, to deal with the
gold revenue in the same manner as ordinary revenue. By placing this
fund at the disposal of the Colonial Legislature, the Home Government
not only removed a great grievance and relieved the hands of the
Lieutenant-Governor from the shackles previously laid upon them by the
Colonial Office, but it took a substantial step toward the end that was
now acknowledged on all sides to be the ultimate outcome of the new
discoveries; viz.
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