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It is quite impossible for me to describe to your Lordship the effect which these discoveries have had upon the whole community, and the influence which their consequences exercise at this time upon the position and prospects of every one, high and low. The discoveries early in the year in the Bathurst district of New South Wales unsettled the public mind of the labouring classes of all the Australian colonies to a certain extent, and had a marked and immediate influence upon the labour market, and the price of provisions in this colony; still both the distance from the scene of the discovery and the approach of winter were in our favour, a journey to the Bathurst district requiring a degree of decision and preparation which few comparatively of the labouring classes were in a position to meet. The discoveries within our bounds, coming as they do at the close of the wet season, in localities in comparative proximity to our towns, exercise a far wider influence upon our exciteable population than did the discoveries in New South Wales upon that colony, under the advantages of a larger population and the greater remoteness of the gold field. Within the last three weeks the towns of Melbourne and Geelong and their large suburbs have been in appearance almost emptied of many classes of their male inhabitants; the streets which for a week or ten days were crowded by drays loading with the outfit for the workings are now seemingly deserted. Not only have the idlers to be found in every community, and day labourers in town and the adjacent country, shopmen, artisans, and mechanics of every description thrown up their employments, and in most cases, leaving their employers and their wives and families to take care of themselves, run off to the workings, but responsible tradesmen, farmers, clerks of every grade, and not a few of the superior classes have followed; some, unable to withstand the mania and force of the stream, or because they were really disposed to venture time and money on the chance, but others, because they were, as employers of labour, left in the lurch and had no other alternative. Cottages are deserted, houses to let, business is at a stand - still, and even schools are closed. In some of the suburbs not a man is left, and the women are known for self-protection to forget neighbours jars, and to group together to keep house. The ships in the harbour are, in a great measure, deserted; and we hear of instances, where not only farmers and respectable agriculturists have found that the only way, as those employed by them deserted, was to leave their farms, join them, and form a band, and go shares, but even masters of vessels, foreseeing the impossibility of maintaining any control over their men otherwise, have made up parties among them to do the same.  Fortunate the family, whatever its position, which retains its servants at any sacrifice, and can further secure the wonted supplies for their households from the few tradesmen who remain, and retain the means of supplying their customers at any augmentation of price. Drained of its labouring population, the price of provisions in the towns is naturally on the increase, for although there may be an' abundant supply within reach, there are not sufficient ,hands to turn it to account. Both here and at Geelong all buildings and contract works, public and private, almost without exception, are at a standstill. No contract can be insisted upon under the circumstances.
In the country your Lordship will easily conceive that, viewing the season at which these circumstances have occurred, and the agricultural and particularly the pastoral interests at stake, that this is the commencement of the shearing Season, and that shortly the harvest will call for labour, great embarrassment and anxiety prevails. Convinced as I am that a reaction must very shortly take place, I cannot but be alive to the difficulty and anxiety under which all are labouring, and should have been glad if it had been in any measure in the power of the Government to alleviate it.
As far as regards the general and popular movement in the first instance, of the violence of which it is in vain for me to attempt to give your Lordship a just idea, I have already observed that doubtless a strong reaction will take place, and that speedily.- Let the quantity of gold distributed under the surface of the country be what it may, hundreds, who have followed the stream and first impulse, and adventured themselves in the gold field, will shortly find that they are physically unfitted for the labour and self-denial which it entails. Large numbers will find that they are equally morally unfitted for it, and will gladly return to the steady gains and comforts of a fixed sphere of labour and home. The unequal distribution of the precious ore under the surface, the great exertion ordinarily required for the search, and the failure of the supply of water which must follow the advance of the season, will all soon produce their effects, and multitudes will be disgusted and disappointed. I have no doubt but a certain amount of distress will follow this excitement, and the rash steps which hundreds have taken in consequence of it. Large numbers not only of the labouring classes but also of clerks, &c., have thrown themselves out of employment, spending their all, if not incurring debt, for an outfit, Which, the object failing, can be of little value. Doubtless much embarrassment will be experienced by the settlers in the remoter districts for the want of hands at the impending shearing.  In the vicinity of the workings this is not the case; and labour, even at the time of my visit, could be readily secured on the very ground amongst those who, while they saw gold drawn by handsful from an adjacent hole, had slaved for a week and had got none, or who at once on arrival on the ground saw that it was harder work than shearing, and held out a chance of less certain profit. The harvest will not be ripe, I trust, before the reaction may have again supplied the labour market with a sufficiency of hands, however expensive.