The Port of Melbourne is Australia's second biggest city and the capital of the State of Victoria. Located at mouth of the Yarra River where it enters the northern end of Port Phillip Bay, the Port of Melbourne is about 33 nautical miles from the Port of Geelong across the Bay and about 727 kilometers southwest of Sydney. In 2006, over 3.5 million people lived in Greater Melbourne.
The Port of Melbourne is the busiest seaport in Australia, handling almost 40% of the country's container traffic, and home to much of the country's automotive industry. It is also an important manufacturing, financial, and business center. The Port of Melbourne is an increasingly-important center for technology, with more than 60 thousand people employed in the information and communications technology sector. With headquarters for two of the country's four major banks, the Port of Melbourne is an important financial hub for the Asia-Pacific region. The Port of Melbourne also has a busy tourism industry that hosted more domestic tourists than Sydney in 2008.
The area surrounding the modern Port of Melbourne was occupied for tens of thousands of years by hunter-gatherers from three indigenous tribes: the Wurundjeri, the Wathaurong, and the Boonwurrung. Clans of the Kulin nation alliance met here, and many native peoples came here for water and food.
Europeans found Port Phillip Bay in 1802 when Captain Matthew Flinders and Lieutenant John Murray visited the bay. In 1803, an exploratory party found the Yarra River and attempted to establish a settlement at the site of the Port of Melbourne, but they moved to Tasmania when they decided the location was not acceptable.
Already part of New South Wales, the first permanent settlement at the Port of Melbourne was established in 1835 when pioneer John Batman reached agreement with the Aboriginal leaders to buy 200 thousand hectares at the head of Port Phillip Bay. The payment was 30 axes, 40 blankets, 50 scissors, 100 knives, 30 mirrors, 100 pounds of flour, 200 handkerchiefs, and six shirts as well as a promise to make similar payments as annual rent. Batman left the area days after signing the treaty.
Two months later, pioneer John Fawkner built a cabin on the banks of the Yarra River at the future site of the Port of Melbourne. Fawkner lived to a ripe age of 76 after having established hotels, a newspaper, booksellers, in the Port of Melbourne as well as acquiring a lot of land and holding a seat in the Legislative Council. The Port of Melbourne is one of few Australian state capitals that was founded by individual enterprise rather than by direction from the government.
The first government administrator arrived in the Port Phillip District in 1836, and the Port of Melbourne became capital of the State of Victoria in 1851. The gold rush of the 1850s brought many new residents to the Port of Melbourne, and it was the Australian commonwealth's first capital from 1901 until 1927 when the capital was moved to Canberra. Just three years after the discovery of gold, the Port of Melbourne was home to 80 thousand people.
The Port of Melbourne's early port facilities gave it a firm base for future growth and for control of the region's trade. A network of railways were constructed between 1856 and 1873 that linked the Port of Melbourne with smaller towns in the area and with the New South Wales railroad system.
The Melbourne Harbour Trust was created in 1877, and the Port of Melbourne's Coode Canal was dredged in the lower Yarra River. The 1870s were a time of growth for the manufacturing industry, and that growth continued until the late 1880s. In 1889, the Port of Melbourne experienced a financial crisis that brought on several decades of economic hardship. A maritime strike and the failure of several banks was followed by a long drought that lasted into the 20th Century, and growth in the formerly booming Port of Melbourne slowed almost to a stop.
In the early 20th Century, Australia became a commonwealth, and the Port of Melbourne was its capital until 1927. Both World Wars stimulated growth in manufacturing, and European immigrants began to flow into the city after the end of World War II.
Growth of the Port of Melbourne continued into the early 1970s when immigration began to decline. The Port of Melbourne economy also slowed in the 1970s and early 1980s. Despite these setbacks, the Port of Melbourne made a number of positive changes. The old inner city was transformed by modern hotels and multi-story office buildings. The area's road system was improved, and the city's suburbs grew in economic importance.
Although the suburban boom hurt the economic importance of the Port of Melbourne's city center, the new Victorian Arts Center brought new cultural life to the city. The neglected waterfront area was also transformed into a modern and popular urban showplace. Revitalization of the Port of Melbourne city center continued well into the 1990s.