The day after their flag was raised on the land they had been granted
by Ngati Whatua the founders of Auckland set to work. The carpenters sent from Sydney to build Governor Hobson's capital began by erecting a
wooden store on the foreshore, near where Shortland St meets Queen St today.

Queen St at that time was a creek, called Horotiu, that ran down the western side of the valley and emptied into the harbour where Swanson St is today. Its lower reaches, later to be the commercial heart of
Auckland, were a swamp of flax and toe toe.

When the official party looked up the sides of the valley to what is now Princes St and Hobson St, and to the distant ridge (Karangahape Rd),
they saw nothing but fern and manuka. Even gardens planted by Ngati Whatua a few years earlier had reverted to the fern and scrub that grew fast in the warm, wet climate.

The surveyor, Felton Mathew, found fern, vines and creepers in his path whenever he tried to peg out roads and possible building sites. He and his assistants tried burning it off, but a fire they started near Mt Eden one day raged out of control and a wind change sent it down the valley.

Mathew's wife, Sarah, watching from the ship Anna Watson, wrote in her diary that the fire "rushed down the little valley with such rapidity that no efforts could arrest its progress, and it was with the greatest difficulty that the Store with its valuable contents was saved".

The store was stocked with building materials and the carpenters set about constructing government offices on the eastern ridge of the valley (Princes St). Houses for the founding officials were given lower priority and they lived in tents set up just over the ridge, looking down on a little bay now buried below Anzac Ave.

It was called Official Bay, though when settlers began to arrive and discovered they were not welcome there, they called it Exclusion Bay, a nickname that stuck.

Prospective settlers such as John Logan Campbell, who had been waiting for the Governor to declare Auckland his capital, set up their tents near the government store on the road up to the ridge. Shortland Cres, named after Hobson's colonial secretary, Willoughby Shortland, was the
main street of the settlement when Queen St was still a swamp.

The store bay had been named Commercial Bay. It was separated from "Official Bay" by a headland that the founders called Britomart Pt, after a naval ship assigned to the colony.

Beyond Official Bay there was another bay, now buried beneath Beach Rd and the former Auckland Railway Station. Mathew named it Mechanics Bay and the government's carpenters and other tradesmen were invited to
pitch their tents there.

Just a day or two after the tents were pitched Ngati Whatua paddled across from Orakei and offered to build whare for the newcomers in exchange for blankets, calico items and tobacco.

The offer was readily accepted. The huts made of thatched raupo and fern provided more shelter and warmth than tents and possibly proved to be warmer than the town's first European houses, walled with unlined weatherboards.

The settlers in their tents at Commercial Bay could not build anything permanent until they could buy plots of land from the Government. Maori traders kept them well supplied with food - fish, pork, potatoes, pumpkin, kumara, peaches - brought by canoe and laid out in flax baskets
on rocks that protruded into the bay from a point where Queens Arcade meets Queen St today.

But land sales had to wait while Hobson gave priority to the construction of Government House (where a later "Old Government House" still stands in the grounds of Auckland University) and then to the building of a military barracks on Britomart Pt.

The British Government had wasted no time sending an Army regiment from Sydney to the Bay of Islands to fulfil its Treaty undertaking to bring law and order to the New Zealand settlements. But Hobson delayed its transfer to Tamaki until he made his arrival in October 1840, a month after the founding party.

The first detachment of 50 soldiers arrived at Auckland in November and set about building a stone fortress from local scoria and clay. The buildings were, by all accounts, dark, sombre and forbidding in appearance, rather like Mt Eden jail, built in similar materials and still standing. (The barracks were later demolished with Britomart Pt but a section of the wall, complete with gun loopholes, survives in the
university grounds.)

The survey of the town also had to await Hobson's arrival. Felton Mathew had a plan ready and it was quickly approved. A land auction date was announced, and immediately brought keen speculative interest from the Australian colonies and other parts of New Zealand. The first lots sold in a new settlement were known to quickly increase their value for resale.

In the event the auction had to be postponed. The new colony was under the jurisdiction of New South Wales and its law required longer notice of Crown land sales.

The impatient settlers turned some of their frustration on Mathew's strange plan which did not follow the natural contours of the Horotiu Valley. Its main street, Victoria St, lay across the valley, running from a square at its junction with Hobson St to a circular plaza where Albert Park is today.

Around the plaza there was to be a ring of "quadrant" streets. One of them, Waterloo Quadrant, survives - in name if not in its intended alignment.

But, more important to the settlers, Mathew's plan defined land they could buy in the auction that would be held at last on April 19, 1841. The lots Mathew had marked out were large enough to be readily subdivided, which added to the speculative frenzy on the auction day.

Speculators are said to have bought 60 per cent of the 119 allotments sold that day. The first lot sold was the Princes St site that became the Northern Club.

The sections went for an average of £600 an acre, giving the Government a great profit on its purchase from Ngati Whatua seven months before. It was money Hobson's threadbare administration sorely needed, but it cost the settlers much of the capital they had put aside to set up a business.

Their resentment at Hobson for the delayed sale was not helped by the participation of some of his officials, the likes of the Colonial Secretary, Shortland, and Felton Mathew, in the fierce bidding that day for a stake in Auckland's future.

Auckland was founded as a government town but almost from the first, its private entrepreneurial instincts were at odds with officialdom's patience, pomp and privileges.