In 1770 Lieutenant (later Captain) James Cook, in command of the HMS Endeavour, sailed along the east coast of Australia, becoming the first known Europeans to do so. On 19 April 1770, the crew of the Endeavour sighted the east coast of Australia and ten days later landed at a bay in what is now southern Sydney. The ship's naturalist, Sir Joseph Banks, was so impressed by the volume of flora and fauna hitherto unknown to European science, that Cook named the inlet Botany Bay. Cook charted the East coast to its northern extent and, on 22 August, at Possession Island in the Torres Strait, Cook wrote in his journal: "I now once more hoisted English Coulers [sic] and in the Name of His Majesty King George the Third, took possession of the whole Eastern Coast from the above Latitude 38°S down to this place by the name of New South Wales." This name was already applied to the south west coast of Hudson Bay, which had been called New South Wales after his native land, by the Welshman Thomas James on 20 August 1631, during a voyage of discovery in search of a Northwest Passage into the South Sea. It was 139 years later that James Cook gave the same name, without explanation, to the east coast of New Holland. Cook and Banks then reported favourably to London on the possibility of establishing a British colony at Botany Bay.
The Kingdom of Great Britain thereby became the first European power to officially claim any area on the Australian mainland. "New South Wales", as defined by Cook's proclamation, covered most of eastern Australia, from 38°S 145°E (near the later site of Mordialloc, Victoria), to the tip of Cape York, with an unspecified western boundary. By implication, the proclamation excluded: Van Diemen's Land (later Tasmania), which had been claimed for the Netherlands by Abel Tasman in 1642; a small part of the mainland south of 38° (later southern Victoria) and; the west coast of the continent (later Western Australia), which Louis de Saint Aloüarn officially claimed for France in 1772 - even though it had been mapped previously by Dutch mariners.
The British claim remained theoretical until January 1788, when Arthur Phillip arrived with the First Fleet to found a convict settlement at what is now Sydney. Phillip, as Governor of New South Wales, exercised nominal authority over all of Australia east of the 135th meridian east between the latitudes of 10°37'S and 43°39'S, which included most of New Zealand except for the southern part of South Island.
By the 1890s, several new factors were drawing the Australian colonies towards political union. The great land boom in Victoria in the 1880s was followed by a prolonged depression, which allowed New South Wales to recover the economic and demographic superiority it had lost in the 1850s. There was a steady rise in imperial sentiment in the 1880s and '90s, which made the creation of united Australian dominion seem an important imperial project. The intrusion of other colonial powers such as France and Germany into the south-west Pacific area made colonial defence an urgent question, which became more urgent with the rise of Japan as an expansionist power. Finally the issue of Chinese and other non-European immigration made federation of the colonies an important issue, with advocates of a White Australia policy arguing the necessity of a national immigration policy.
As a result the movement for federation was initiated by Parkes with his Tenterfield Oration of 1889 (earning him the title "Father of Federation"), and carried forward after Parkes' death by another New South Wales politician, Edmund Barton. Opinion in New South Wales about federation remained divided through the 1890s. The northern and southern border regions, which were most inconvenienced by the colonial borders and the system of intercolonial tariffs, were strongly in favour, while many in the Sydney commercial community were sceptical, fearing that a national Parliament would impose a national tariff (which was indeed what happened). The first attempt at federation in 1891 failed, mainly as a result of the economic crisis of the early '90s. It was the federalists of the border regions who revived the federal movement in the later '90s, leading up to the Constitutional Convention of 1897-98 which adopted a draft Australian Constitution.
When the draft was put to referendum in New South Wales in 1899, Reid (Free Trade Premier from 1894 to 1899), adopted an equivocal position, earning him the nickname "Yes-No Reid." The draft was rejected, mainly because New South Wales voters thought it gave the proposed Senate, which would be dominated by the smaller states, too much power. Reid was able to bargain with the other Premiers to modify the draft so that it suited New South Wales interests, and the draft was then approved. On 1 January 1901, following a proclamation by Queen Victoria, New South Wales ceased to be a self-governing colony and became a state of the Commonwealth of Australia.