Walter Christallerıs ³Central Place Theory" states that the central place (Melbourne) provides the hinterland with goods and services that are of high cost where as low cost necessities would be supplied by local markets in the hinterland. High cost goods would be sold in larger cities because the ³threshold² for these goods would be high enough to sustain a store. Low cost necessity goods like bread and milk would be sold at small markets in the small towns surrounding the central place. In light of this theory we can see that population distribution would decrease as you made your way out of the central place and then begin the rise again as one became closer to the next central city. At the midway point between the two central cities you would find the least expensive land. This land was often used for purposes such as farming and grazing.
Christallerıs theory, however, does not hold in Victoria for several reasons. To begin, there were only few supporting cities located around Melbourne like Bendigo, Ballarat and Geelong (all to the west). There were no other central cities either, the nearest would be Sydney which is over 900 kilometers from Melbourne. There were however, a multitude of small cities caused by the gold rushes of the mid and late 1800ıs. This caused Melbourneıs hinterland population to fall dramatically as it reached the ³outback.² This would lead us to believe that Melbourne could be sketched as a central city with several concentric circles, each one holding less and less population. This concentric circle concept is altered by the fact that Melbourne is sitting on the rather large Port Phillip Bay.
The largest factor contributing to the non-conformation with the Central Place Theory is the actions of government officials in Melbourne. After the initial railroad entrepreneurs fell into bankruptcy the government was forced to buy them out and make a go of it themselves. However, these government officials found they could use the railroad to line their own pockets. The scheme went as follows; First, the officials would trek out into the bushland and purchase cheep grazing land. Then, they would build a railroad line out to their once inexpensive land. This caused land prices to soar. The more wealthy middle and upper-class citizens would purchase the now subdivided land and build their own houses. Public transportation made it possible for these citizens to reach the outer suburbs. Reasons for this were threefold: transport time in and out of the city was now very small. Train transport was much faster then omnibuses and trams; they provided exact schedules which made it possible for passengers to rely on them for everyday transport; the price of a ticket was within the budget of itıs upper and middle-class passengers.
This caused a ring of unused land between the central station (Flinders Station) in Melbourne and the final termini of the railroads. The unused land stayed unused because the lower-class workers still had to be within walking distance of their work and the mid and upper-class preferred to either be in close, upper-class, suburbs like St. Kilda, Windsor, Brighton and Kew or in the far out suburbs of Frankston, Pakenham and Whittlesea.
This situation, however, fixed itself over time. Lower-class workers became more wealthy due to government intervention in the case of workers rights and to the rise of unions. This new found wealth allowed them move out of walking distance and into the previously uninhabited band of land between the outer and inner suburbs. Another factor leading to the settlement of the inner area was that the railroad made an allowance for special ³worker trains² that cost less and where directed right to the factory areas.