On April 3, 1886 The Mercury published an article that left the good Aldermen of Launceston and Police Superintendent Mr James Coulter, seething.
The paper claimed that another attempt had been made to recruit to the ranks of a notorious Launceston brothel respectable young girls from Hobart.
They were being decoyed under promises of honest employment and were ultimately being led to ruin.
The paper alleged that considerable sums of money were promised to certain individuals for procuring the girls.
It further alleged that the house was frequented by influential persons and the proprietress had made a great deal of money and continually escaped prosecution and exposure.
The Daily Telegraph reported a few days later that the Launceston police had no knowledge of any decoy practices happening.
They recommended that those who had supplied the information to TheMercury were duty bound to pass it on to the police to enable them to bring the offenders to justice.
At the Launceston Council meeting on April 5, 1886, Alderman Farrelly commented on TheMercury report and stated that such events could not occur in a small town like Launceston.
From information he had obtained from the police he found the article "utterly untrue in every particular".
He stated that it was true that certain girls came to Launceston from Hobart to escape the Contagious Diseases Act, but they then returned to the capital.
On April 13, 1886, The Daily Telegraph, under the heading "The Hobart Libel" then proceeded to publish all the correspondence between the Hobart and Launceston police which was presented to the council.
This revealed the police were upset that The Mercury had made such accusations without first referring any knowledge they had to them.
It appeared, however, that the whole episode arose out of the frustration of a Hobart Government official when his private prostitute came to Launceston and went to stay at a brothel with her elder sister.
The official the police suspected, wrote to the editor of TheMercury anonymously "exposing the scandal" in the hope of getting the girl to return to Hobart.
The Hobart police superintendent named the girls as the Dillon sisters and the brothel as Myrtle Cottage, located on the north side of Frederick Street, just back from the corner with Margaret Street, and run by Mrs Bridget Lupton.
He described the Dillon girls as being of loose character and had been known as such for "some considerable time past".
Bridget had form in "the business" and had previously run a notorious brothel opposite City Park on the corner of Tamar and Cameron streets.
Perhaps the adverse publicity proved too much for her and husband George as by June 1886, Myrtle Cottage was up for let, advertised as being suitable for a school or a boarding house with immediate possession.
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