La Trobe faced opposition from the outset. A public meeting chaired by the Mayor in Melbourne on 30 August argued that the industry was being strangled at birth and people driven from Victoria, that the approach used in NSW where miners did not purchase licenses until their working became ‘remunerative’, that it was ‘highly inexpedient to impose any tax or monthly license’ and supported the resolutions passed by miners at Buninyong.  On 25 August, the first protest meeting was held at Buninyong chaired by Herbert Swindells of Geelong calling for fair play for the diggers and resolving to resist the tax by all lawful means. The Geelong Advertiser’s reporter Alfred Clarke attended the meeting under the stars and wrote that ‘there has not been a more gross attempt at injustice since the days of Wat Tyler’.
It is a solemn protest of labour against oppression, an outburst of light, reason and right against the infliction of an effete objectionable Royal claim...It is taxation without representation…tonight for the first time since Australia rose from the bosom of the ocean, were men strong in their sense of right, lifting up a protest against an impending wrong, and protesting against the Government. Let the Government beware. 
When Captain Dana and the Native Police arrived, most diggers retreated to the hills  James Oddie, who owned a foundry in Geelong and several other businessmen from the community organised the digging on the basis of mutual consent establishing an orderly structure for mining at what became known as Golden Point. Dana returned to the Buninyong diggings on 20 September accompanied by Gold Commissioner Doveton but in collecting £400 in revenue lost the Government a great deal of goodwill.  Doveton took authority from the local diggers’ organisation and imposed the order of the Victorian government on the mining community. He announced that they must pay a license fee of 15 shillings for the remainder of September and 30 shillings a month thereafter. He also tampered with the frontage system the miners had established reducing their claims from 10 feet by 60 feet in depth to eight feet square (that would soon be worked out) and held that individuals could only hold two claims.
The result was an angry meeting on 21 September where the diggers decided that five shillings a month was an appropriate and fair license fee. Resolutions were also passed condemning the new frontage system. Oddie and Swinsdells were elected to represent the miners’ grievances to the Commissioner but he dismissed the deputation saying that he was there to enforce the law not make it. Doveton also gave arbitrary and undoubtedly unlawful instructions that Oddie and Swinsdells should not be issued with licenses as he saw them as troublemakers. Colonial order was imposed on the community with the establishment of a court of Petty Sessions and a Police Camp under Captain Dana in late September. La Trobe would have done well to listen to the local community but he did not and the seeds of resentment against the colonial administration of the goldfields had been sown. His optimism that a ‘slight show of opposition...gave way at once to a general desire...to secure licenses…’ was not reflected in the collection of license fees in Ballarat where less than half of the 6,000 diggers paid in October. As other goldfields opened up, most diggers experienced sizable hardship because of the license system and fumed at its injustice. By the end of September 1851 there was already a general resistance movement.
Mining at Ballarat faltered by mid-October and many left the diggings and it seemed that La Trobe’s policy had paid off. Nonetheless, the discovery of gold near Mount Alexander, in the area that became Castlemaine and then in Bendigo, led to a second rush at the end of October dwarfing that at Ballarat.  Melbourne and Geelong were almost entirely deserted by men for a second time. Pending official direction from London, La Trobe, with his Executive Council, attempted to manage the goldfields and gold revenue without the Legislative Council that voted to withhold much ordinary revenue.  As a result, the finance needed for general expenses such as public servants’ wages and infrastructure were not paid making it difficult to administer established parts of the colony let alone the expanding gold communities. Although this issue was soon resolved, friction between the government and the Council continued to hamper management of the goldfields.
By the end of November, the population of the Forest Creek area had reached 15,000 and with two weeks 30,000. The scale of second rush led to a catastrophic breakdown of government by December and there were ‘signs of panic’ in La Trobe’s actions.  The Governor and his advisors in the Legislative Council were under pressure to halt the flow of labour to the goldfields.
The RUSH to the goldfields is now so great that serious fears begin to be entertained regarding the wheat crops, and it becomes a matter for the prompt attention of the Government as to what is to be done to save the country… Whether to raise the gold licence today to 10 pounds a month for the next three months, or to prohibit digging for that time appears only feasible. The RUSH to these mines is FEARFUL, and no wonder. 
Gold Commissioners and their staff were slowly being recruited and initially did little more than settle disputes and collect the license fees. There were few police to enforce payment and between November 1851 and January 1852 less than half of the diggers paid. Faced with an obstructive Legislative Council and massive migration, he called for military aid. As well as seeking military reinforcements, on 1 December 1851, La Trobe doubled the license fee to £3 per month, a blunder of major proportions.  The new license was to apply to diggers but also to shopkeepers and others providing services on the goldfields. Though it is unclear who originated the policy, La Trobe went along with it appearing blinkered to the legitimate concerns of diggers.
The reaction was uproar: few could pay and most refused to do so. The diggers responded with extraordinary unity and organisational skill establishing the basic pattern for constitutional protest over the following three years. At Loddon, a Tax Prevention Committee was formed and anyone paying the fee was given twelve hours to leave the diggings while at Ballarat opinion favoured offering only thirty shillings for the next month. On 8 December 1851, the Argus correspondent on the Mount Alexander diggings reported that a notice addressed to ‘fellow diggers’ had appeared at Forest Creek.  The notice, invoked the familiar language of radical dissent criticising the tyrannical laws of the colonial legislature dominated by the conservative pastoral squattocracy. It continued provocatively, informing the Forest Creek mining community that: ‘intelligence has just arrived of the resolution of the government to double the license fee. Will you tamely submit to the imposition or assert your rights like men?’ The appeal was to masculinity, independence and British identity:
Ye are Britons! Would you submit to oppression and injustice’ and represented the first challenge to the colonial licensing system on the goldfields. The provocative tone continued throughout the notice and concluded with a resolution to ‘meet – agitate – be unanimous – and if there is justice in the land, they will, they must abolish the imposition.
The intent of the document was clear and the calling of a ‘monster meeting’ spread rapidly throughout the diggings. After the distribution of that notice, each of the diggings held small local meetings to plan the next step. A delegation of diggers approached Commissioner Powlett, asking him to sponsor a mass meeting so that diggers could express their views directly to him. He refused, saying he had urgent business in Melbourne.
The reaction was immediate and up to 14,000 men met at Golden Point on 15 December 1851.  Many spoke but the recurrent theme was for unity in face of a tyrannical administration. Laurence Potts, describing the people assembled before him, commented:
I see before me some 10,000 to 12,000 men, which any country in the world might be proud to own as her own sons...This very cream of Victoria, and the sinews of her strength. Now, my friends, let it be seen this day whether you intend to be slaves or Britons, whether you will basely bow down your necks to the yoke, or whether, like true men, you will support your rights.
Potts begged his audience not to pay the license fee and was rewarded with a universal response of ‘never’ from all parts of Golden Point. Although there was some vague talk of forcing the government to change its position, Potts and other leaders quashed any suggestion that force should be used except in self-defence and proclaimed their support for the monarchy.
That this meeting while deprecating the use of physical force, and pledging itself not to resort to it except in cases of self-defence; at the same time pledges itself to relieve or release any or all diggers that on account of non-payment of £3 licenses may be fined or confined by Government orders or Government agents, should Government temerity proceed to such illegal lengths.
There was no contact between the diggers’ leaders and the popular leaders on the Legislative Council though they were in touch with radicals in Geelong and had strong support from the Argus. The scale of the meeting, coupled with the resolve of its participants, startled the colonial government into a hasty retreat and the license fee remained unaltered at thirty shillings a month. This decision was declared in an order dated 13 December, two days before the ‘monster meeting’. However, it was not reported by the Argus until 16 December and then said to be ‘under discussion’, while the Government Gazette did not confirm the decision until 24 December. Whether the rescission order was deliberately pre-dated, so that the Governor did not appear to buckling under digger pressure, is open to conjecture. Whether this calmed the situation is difficult to estimate but a meeting of diggers in late December 1851 at Flagstaff Hill gave the impression that it had little impact on digger opinion:
…the withdrawal of the £3 Proclamation without substituting any general or fixed code of regulations [was] a mere ruse…that the Governor had sent to Van Diemen’s Land for prisoners to convert into constables, and to Sydney to beg for more troops, which arrived and confirmed the weakness and faithlessness of the Government, and also their alliance with the Squatting interest to drive you to their service… 
Why did La Trobe and his government make such a crass blunder? It appeared urgent to restore social stability by reducing the numbers on the fields. At the time, it was generally accepted that this was done to safeguard the harvest; in fact this was successfully gathered in January 1852. For La Trobe, increasing the license fee went some way to resolving this problem caused by the failure of the Legislative Council to vote additional expenditure. He believed that a majority of diggers could afford to pay without great hardship though, in reality, the level of success was low. While the policy may have had some justification, Serle is right to conclude that ‘foolishness lay rather in the belief that it could be carried out’. La Trobe had neither the police nor the soldiers to force compliance on the diggers.
Until the Legislative Council first met on 11 November, the government had managed the goldfields by regulation. Once it did meet, the government maintained its right to continue managing the fields and using gold revenue as part of the Crown Lands until it received instructions from the Colonial Office. Although permission to use gold revenue for general expenditure was known in March 1852, instructions to transfer its control to the Council did not reach Victoria until early September. This impasse, though constitutionally justifiable had important political consequences. During the license crisis in December 1851 the government acted consistently in not consulting the Legislative Council but despite this the Council proved sufficiently independent of government to debate the issue. Matters deteriorated further when, on 11 December 1851 Stawell introduced a Vagrant Act Amendment Bill that covered the whole system of goldfields administration.  Though no legislation was necessary, the government sought the backing of the Council to give the measure some legitimacy with public opinion. The result was confusion with government spokesmen admitting that the license system was unjust and unsatisfactory and with calls for its replacement by an export tax or some other tax on earnings. Matters then took on the character of farce. The Government was demanding agreement to a bill whose principles the Council rejected and that public opinion condemned. The original bill had classified all those without licenses as ‘vagrants’ and the Council opposed this provocative phrasing on the ground that at the time many normally law-abiding individuals refused to pay for licenses as a matter of principle.
The Bill enacted that every person who, without license or authority, shall search, dig or mine…should be deemed an idle and disorderly person… 
Nonetheless, the Legislative Council eventually passed the bill in a revised form.  By the end of 1851, the government was discredited for introducing a license system and the Legislative Council in supporting the amended Vagrant Bill had lost its standing with the diggers. Both the Government and the Council seemed incapable of seeing beyond short-term solutions to the problem of licensing that even La Trobe recognised was unsatisfactory.
 ‘The Digging Licenses’, Argus, 1 September 1851, p. 2.
 Argus, 26 August 1851, p. 2, Geelong Advertiser, 2 September 1851.
 Norman, Marilynn I., ‘Henry Edward Pulteney Dana (1820-1852)’, ADB, Vol. 1, p. 278.
 Serle, p. 20. ‘Ballarat Diggings, Buninyong, Thursday Morning’. Geelong Advertiser, 26 September 1851, p. 2.
 La Trobe to Earl Grey, 30 October 1851 cit, Serle, p. 21.
 Forster, Harley W., The Central Goldfields: Historical Backgrounds-Bendigo, Castlemaine and neighbourhood, revised edition, (Cyprus Books), 1973, provides the context. Cusack, Frank, (ed.), F. McKenzie-Clarke Early Days on Bendigo, (Queensberry Hill Press) 1979, reprints collected reminiscences of McKenzie-Clarke reprinted from the Bendigo Advertiser under the title ‘The First Discovery of Gold at Bendigo’ in the 1880s that includes an appendix on the discovery of gold in the area.
 ‘The Estimates’, Argus, 19 November 1851, p. 4, listed estimates submitted the previous day to the Legislative Council. Argus, 5 December 1851, pp. 4-5, saw rejection of spending on Mounted Police from general revenue; ‘Legislative Council’, Argus, 12 December 1851, pp. 2-3, saw further rejections in favour of the use of Territorial Revenues.
 Serle, p. 24.
 Melbourne Morning Herald, 25 November 1851, p. 4.
 ‘Additional Gold Regulations’, Argus, 5 December 1851, p. 3.
 Mount Alexander (taking in the goldfields of Castlemaine and Bendigo) was one of the world’s richest shallow alluvial goldfields yielding around four million ounces of gold, most of which was found in the first two years of the rush and within five metres of the surface. Reeves, Keir, and Wong Hoy, Kevin, ‘Beyond a European protest: reappraising Chinese agency on the Victorian goldfields’, in ibid, Mayne, Alan, (ed.), Eureka: Reappraising an Australian Legend, pp. 158-165, ascribes great significance to the Mount Alexander ‘monster meeting’. For a description of the meeting on 8 December, see ‘Mount Alexander: To the Editor of the Argus’, Argus, 13 December 1851, p. 2.
 The use of the title ‘monster meeting’ given to the Castlemaine assembly would have been a particularly loaded one, the same term was used to describe the largest political protest to take place in Britain, the Chartist monster meeting on Kennington Common, London, on 10 April 1848.
 ‘Meeting of the Diggers at Mount Alexander’, Argus, 18 December 1851, p. 2, Morning Herald, 20 December 1851, p. 3, are the main sources for this meeting.
 ‘Gold Diggers’ Meeting’, Argus, 30 December 1851, p. 2.
 Serle, p. 27.
 ‘Legislative Council’, Argus, 12 December 1851, p. 2. The Vagrant Act (13 Victoria 46) had been disallowed by the Colonial Office at the beginning of 1851, ‘Disallowance of Vagrant Act’, Sydney Morning Herald, 4 January 1851, Argus, 14 January 1851. In both NSW and Victoria later in the year, the original legislation was amended to satisfy London’s requirements and to address the question of gold miners but with very different responses.
 ‘Legislative Council’, Argus, 20 December 1851, p. 2. The Bill passed its second reading by 17 to 7.
 ‘Legislative Council’, Geelong Advertiser, 22 December 1851, p. 2.