On his arrival in the colony, Franklin found that the police force was in a ‘very efficient state’ and effectively managed by Chief Police Magistrate Forster. With the spread of population to remote areas, Franklin appointed new Assistant Police Magistrates and police, for example at Morven, Avoca, and Spring Bay. This resulted in unpopular increases in the cost of policing; in 1838, this was estimated at £24,836 2s 6d. However, many colonists were unhappy about paying escalating police costs to control the increasing number of British criminals. Every time the police estimates were debated in the Legislative Council, the unofficial members supported the vote only in the belief that, after paying for emigrants, the revenue from land sales and rents would cover police and gaol expenses. Both the Whig government and Peel’s Conservative administration that came into power in 1841 needed to reduce the ‘cost of empire’. Economic depression in Britain from the mid-1830s necessitated a reduction in government spending and, from the perspective of London if not Hobart, it did not seem unreasonable to transfer the cost for maintaining public order to the colonies and that colonists should bare the cost of their own security. Franklin and his successor grappled with this problem but it was not resolved until 1846 when the Colonial Office finally agreed to pay two-thirds of the cost of police and gaols.
The major problem with the Colonial Office’s policy was that Franklin also faced declining revenue since economic prosperity in VDL had declined with the fall in the price of wool on the English market, banks limiting their discounts and settlers disinclined to speculate in purchasing Crown lands. The sales of Crown land no longer produced significant revenue because much of the best land had been granted or sold and a recent distribution of 25,000 acres to applicants for secondary grants further reduced the amount of land available. The emigration of farmers and stock to Port Phillip further diminished revenue and deprived the colony of potential land buyers. In May 1838, Franklin faced with a budget deficit told the Colonial Office that since revenue from land was falling he would be unable to pay the expenses of emigration, let alone the police. He had little choice but to transfer £5,000 from the Military to the Colonial Chest to meet the expenses of police and gaols. Franklin suggested two ways to resolve his budget deficit. He proposed either that the Commissariat should pay for police and gaols and the expenses of emigration or that police and gaols should be paid out of the land revenue with any deficiencies paid by the Commissariat. He conceded that the British Treasury would not pay the total police costs, but if it paid two-thirds of the cost, then the Legislative Council would vote for the remaining one-third. Previously, Franklin’s casting vote had defeated a resolution to this effect in the Legislative Council. Given the large number of 18,000 British convicts, Franklin now judged that the Legislative Council and residents would consider one-third as ‘a fair and reasonable charge’. He informed Glenelg that far from reducing police numbers the need to ‘discipline and control of the Convict population and for the prevention of Bushranging’ meant that the number of police needed to increase. Glenelg reprimanded Franklin for defraying the expenses of the police from the Military Chest that was devoted to convict purposes. Those funds had been part of the Estimates approved by the House of Commons and could not be used for other purposes without parliamentary consent. This response inflamed the situation.
In 1839, Franklin’s Estimates included police costs of £24,471 2s 6d for 1840, but the Legislative Council voted by seven votes to six to pay only £8,247 6s 10d. In their resolution against the Estimates, the Legislative Councillors stated that they did not think the costs were ‘too large’ for the needs of the colony or that the police were ‘inefficient’ but they wanted the British Government to treat them fairly and pay a fair share of policing costs. However, the Legislative Council knew that if Franklin reduced police numbers to the equivalent of one-third their cost, the convicts could not be controlled and VDL would be ruined. Franklin left it to the experience of Legislative Councillors ‘to decide upon the Force requisite to preserve that security of life and property which, so happily for us all, exists throughout society’. This ploy worked and the non-official members of the Legislative Council passed the full police estimates. But Franklin wanted to stop the annual ‘struggle’ between his government and the Legislative Council by ‘appropriating a fixed amount of the Land Fund in and of the Local Revenue yearly’, allocating the rest to immigration. The Colonial Office praised his handling of the Legislative Councillors and sanctioned the use of 25 per cent of the land revenue for the police in 1841, but thought his financial resources adequate to pay for the police and, at it had in NSW, urged Franklin to impose local taxation to fund the police in the expanding rural districts.
Relations between VDL and the Colonial Office cooled during Lord Stanley’s tenure as Secretary of State from 1841 to 1845. Stanley ruled the colonies with ‘a rod of iron’ and wanted ‘the most rigid economy’ exercised in the public service. In 1843, Franklin was reprimanded after establishing a Water Police to stop convicts escaping and to detect smugglers, who deprived the colony of revenue. As the Water Police were employed on imperial work, Franklin charged only a part of their expenses to colonial funds. Stanley did not agree and stated that imperial funds should not be used for colonial purposes based on the argument that the arrangement would improve security and prevent convict irregularities. As the British Government funded the significant costs of the Marine and Port Departments, Stanley instructed the Commissariat to cease payments for the Water Police and to reclaim payments already made. Declining land revenue, a great increase in convicts and a wider use of probation gangs placed great pressure on police resources.
Franklin pointed out to Stanley that the argument that the British Government should pay all police expenses was never stronger. No doubt angered at rumours of his imminent recall, he argued that the interests of VDL had been made ‘sufficiently subservient to those of Great Britain by the mere fact of its having been rendered the almost sole Depository of British Felons’. He expected a budget deficit of £17,907 in 1843 or worse if the Land Fund did not meet moderate expectations. He had investigated ways of economising, but almost every public department was ‘much more extensive than it would be were this not a Penal Colony’. John Eardley-Wilmot, the new Governor, received Stanley’s sharp response: ‘you must dismiss from your mind all expectations’ that the British Government would resume payment of the police and that it was not ‘unfair’ to expect the colonists to pay for their police. Stanley hoped that ‘a searching revision of the public expenditure’ would reveal ways to economise. If money could not be found to fund the colonial public service, then it would be Eardley-Wilmot’s ‘duty to discontinue their employment instead of looking to this Country for assistance’.
 CO 280/79, Franklin to Glenelg, 10 August 1837.
 Ibid, Fitzpatrick, K., Sir John Franklin in Tasmania, 1837-1843, pp. 99-100, 215-217.
 CO 280/94, Franklin to Glenelg, 17 May 1838; AOT GO1/32, p. 158, D.383, Stephen to Spearman, 26 April 1838; and Launceston Advertiser, 19 July 1838.
 AOT GO1/32, p.158, D.383, Glenelg to Franklin, 9 November 1838
 CO 280/109, Franklin to Glenelg, 10 July 1839, minute by Franklin, 8 June 1839.
 Hobart Town Gazette, 21 August 1840.
 CO 280/121, Franklin to Russell, 15 October 1840, minute by Franklin, 17 August 1840
 AOT GO 1/39, p. 523, D.142, Russell to Franklin, 25 September 1840; CO 280/121, CO to Trevelyan, 25 June 1841; AOT GO1/43, p. 603, D.302, Russell to Franklin, 31 August 1841.
 Cornwall Chronicle, 8 March 1845.
 AOT GO1/51, p. 529, D.95, Stanley to Eardley-Wilmot, 22 September 1843.
 CO 280/153, Franklin to Stanley, 12 January 1843.
 CO 280/153, Stanley to Eardley-Wilmot, 10 September 1843.
 CO 280/153, Franklin to Stanley, 24 February 1843.
 AOT GO1/51, p. 529, D.95, Stanley to Eardley-Wilmot, 22 September 1843.