The city was named after the British Prime Minister William Lamb, 2nd Viscount Melbourne, who’s home was near the village of Melbourne in Derbyshire. Melbourne in Derbyshire derives its name from the Old English for “mill stream” (mylla burne).
The European settlement at Melbourne was founded in 1835 by settlers coming from Tasmania (then known as Van Diemen’s Land), where they had difficulty finding available land.
The area was already inhabited by the Kulin people, then indigenous to the area. A transaction was negotiated for 600,000 acres of land from eight Wurundjeri representatives; this was later annulled by the New South Wales government (then governing all of eastern mainland Australia), who compensated the settlers in exchange. Ultimately, settlement continued regardless.
It was the capital first of the Port Phillip District of New South Wales and then of the separate colony of Victoria. With the discovery of gold in Victoria in the 1850s, leading to the Victorian gold rush, Melbourne quickly grew as a port and service centre.
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Later it became Australia’s leading manufacturing centre. During the 1880s, Melbourne was the second largest city in the British Empire, and came to be known as “Marvellous Melbourne”. The 1880s saw the construction of many hi-rise Victorian buildings and coffee palaces, terrace housing, grand boulevards and gardens throughout the city. Victorian architecture abounds in Melbourne and today the city is home to the largest number of surviving Victorian era buildings of any city in the world other than London.
Melbourne was the capital city of Australia from 1901 until 1927. It became the national capital at Australia’s Federation on 1 January 1901. The first Federal parliament was opened on 9 May of that year in the Royal Exhibition Building. The seat of government and the national capital remained in Melbourne until 1927 when it moved to the new capital city of Canberra.
Melbourne continued to expand steadily throughout the first half of the 20th century. It became the Allied Pacific Headquarters for a time from 1942 to 1944 as General Douglas MacArthur established Australia as a launch base for Pacific operations.
During World War II Melbourne industries flourished and expanded with war time production. This set Melbourne on a course for significant post war expansion, particularly with the post-World War II influx of immigrants and the prestige of hosting the Olympic Games in 1956.
Even after the national capital moved to Canberra, Melbourne remained Australia’s business and finance capital until the 1970s, when it began to lose this primacy to Sydney. Melbourne also developed as a centre of the arts.
After a boom in the 1980s Melbourne experienced a (largely property market and manufacturing driven) slump from 1989 to 1992, with a loss of employment and a drain of population to New South Wales and Queensland.
In the 1990s, the Victorian state government of Premier Jeff Kennett (Liberal) sought to reverse this trend with the aggressive development of new public buildings, such as the Melbourne Museum, Federation Square, the Melbourne Exhibition and Convention Centre (nicknamed “Jeff’s Shed”), Crown Casino, capital works (most notably the City Link tollway), the (somewhat controversial) selling of state assets (the State Electricity
Commission and some state schools), the pruning back of state services and the publicising of Melbourne’s merits both to outsiders and Melburnians. This continued under the government of recent Premier Steve Bracks (Labor).
Since 1997, Melbourne has maintained significant population and employment growth. Furthermore, there has been substantial international investment in the city’s industries and property market. 2006 figures from the Australian Bureau of Statistics show that since 2000 Melbourne has sustained the highest population and economic growth rate of any Australian city.