Governor William Bligh made enemies easily. He was competent, but imperious and sometimes arbitrary in manner.
John Macarthur was on the make - corrupt and determined to have his way.
He'd already quarrelled with previous governors and fought three duels.
A clash between the two was inevitable.
On January 26, 1808 matters came to a head.
Bligh had ordered Macarthur's arrest.
Instead, Macarthur took advantage of the lax discipline around the foundation day celebration. He sent a detachment of his supporters in the military to arrest and imprison Governor Bligh.
That day, January 26, would be forever remembered as the day of Australia's only successful armed coup - an action that became known as the Rum Rebellion.
The Deputy Governor at the time was Colonel William Paterson, who'd been sent to establish a colony on the Tamar.
He was a horticulturalist by training and in 1804 found a pretty spot with good water and called it York Town.
His wife joined him shortly after, and he put down roots over the following three years.
He had his extensive garden and was comfortable, and had no desire to become embroiled in colonial politics.
He stayed put even when flooding drove the rest of the York Town settlement to relocate to Launceston in 1806.
Nevertheless, with Bligh in prison, Paterson was now acting Governor of the Australian colonies.
York Town, as his seat, was in effect the administrative capital of Australia.
Paterson managed to prevaricate for a year before being forced back to Sydney to take charge.
He immediately put Captain Bligh under house arrest, and only released him when Bligh agreed to return to England.
However, Bligh reneged on the deal and sailed to Hobart Town to try to persuade Lt-Governor David Collins to join him, to retake control in Sydney.
Paterson ordered Collins not to allow Bligh to land, leaving the former Governor marooned at the mouth of the Derwent for a year.
Eventually a new Governor, General Lachlan Macquarie, arrived to relieve Paterson and Bligh was formally recalled to England. Shortly afterwards, Paterson also left for England.
Sadly, he died just a few weeks later off Cape Horn on June 21, 1810.
In total, Paterson had managed to remain aloof and ensconced in York Town for a year - from February 1808 to January 1809.
During this period he was Acting Governor in absentia.
And as a result, one could say that the capitals of Australia have been, in order: Sydney, York Town, Sydney, Melbourne and Canberra.
Each year now on Australia Day, a group of dedicated and passionate local history buffs remember the time with a Rum Rebellion Day commemoration.
They meet at the York Town monument to toast Captain Bligh, William Paterson, John Macarthur, and the year that York Town was the capital of Australia.