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Britain's first shipment of 750 convicts arrived in New South Wales in January of 1788 and immediately fell on hard times. Although they were expected to create a self-sustaining farming community shortly after arriving in the antipodes, most convicts were urban dwellers with no farming or construction experience. Worse still, they were ignorant of the southern hemisphere's seasons and rain patterns. As a result, the colony faced disease and chronic shortages until subsequent fleets arrived bearing more convicts, supplies, and the first in a growing wave of free settlers.

As the new colony took shape, it quickly assumed a highly stratified social structure. At the apex were the free settlers, colonial administrators, and soldiers sent to guard the convict population. These figures not only regarded themselves as paragons of civilized society and looked down upon all other social groups, but they also took advantage of their position to acquire and develop the largest and most lucrative land grants, which they worked with convict labor. After serving out their sentences, former convicts took on the title of emancipists and occupied the middle level of Australia's settler society. Although many became quite wealthy and eventually acquired large land grants and positions of authority within the community, their social mobility was generally restricted by their convict past. Finally, Australia's large convict population naturally occupied the lowest level of white society where they faced extensive discrimination, hard labor, and brutal punishment for any additional offenses committed in the penal colony. Paranoid personal feuds, drunkenness, brawls, floggings, and public hangings were all common features of early colonial life and served to create an atmosphere of violence and social division. Further divisions came in the form of Anglo-Irish and Protestant-Catholic rivalries imported from the metropole.

The aboriginal population, a group that received the worst treatment meted out to any indigenous people in the entire British empire, constituted the very bottom of Australia's social hierarchy. While Lachlan Macquarie (1761-1824), who served as governor of New South Wales (1810-1821), made some early efforts to assimilate the aborigines and transform them into European-style farmers, the bulk of settlers concentrated on dispossessing the aborigines of their land as quickly as possible. Resistance was met with military reprisals and forced relocations. As settlers expanded deeper and deeper into Australia's interior, they initiated a campaign of genocide in which the aborigines were denied access to water holes, shot, driven off their land, given poisoned food, and deliberately infected with smallpox. While most survivors retreated even further into the interior, some drifted into the newly created towns to beg or take jobs as prostitutes or menial laborers. . .

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