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In the 1830's, anti-transport champion Sir William Molesworth, a Member of the House of Commons Select committee, concluded it did not work in deterring crime and should be abolished in favour of gang labour on public works.

By this time several well established colonial areas were refusing to accept the convicts. They were attracting emigrants who could carry out the labouring work. Settlers who had arrived legally resented having prisoners sent to them. Transportation had also become very expensive, and so the government looked for cheaper solutions to the criminal problems at home.

In 1840, Lord John Russell made new proposals. These suggested a mixed system. More prisoners would be kept on the hulks in England to serve their sentences and an experimental penitentiary would be built. Prisoners would continue to be sent to Van Diemen's Land and more convicts would be transported to Bermuda. It was also decided that every man would work the start of his sentence in Britian on hard labour in public works such as road building.

In 1839-40 transportation to New South Wales was discontinued. By this time, New South Wales well developed and was considered a desirable place for settlers. It was no longer seen as a punishment to send convicts there. Transportation continued to Van Diemen's Land until 1853. In 1849 transportation started to Western Australia.

Other outlets were sought to take the prisoners but most refused. When the 3rd Earl Grey took over as secretary of state he proposed an 'exile system'. Well behaved convicts would be sent to Australia and receive their ticket of leave (freedom) on arrival, as long as they did not return to Britain. Punishment for these men started with solitary confinement in prison, followed by hard labour then assisted exile to colonies.

To make this more acceptable to the colonies, the same number of free emigrants would be sent. There was no shortage of prisoners opting for this, as conditions were much more favourable than on the hulks. However it did not satisfy the colonial authorities and a mass demonstration occurred on 11th June 1849 in Sydney. The government remembered the rebellion of the American colonies, and decided to end the system.

After the 1853 penal servitude act, only long-term transportation was retained and it was finally abolished after the penal servitude act of 1857. Some convicts were still transported for a while after the 1857 act. The last transportations took place in 1868.

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