History of Sydney
From 1788 to 1900 Sydney was the capital of the British colony of New South Wales. An elected city council was established in 1840. In 1900, Sydney became a state capital, when New South Wales voted to join the Australian Federation. Sydney today is Australia's largest city and a major international capital of culture and finance. The city has played host to many international events, including the 2000 Summer Olympics.
History of Canberra
The district's transformation from a New South Wales rural area to a built-up national capital began during political debates over Federation in the late 19th century. Due to a temporary Gold Rush at the time, Melbourne was Australia's largest city and a potential place for the capital. However Sydney was Australia's oldest city, and so also had a justifiable claim to host the new nation's Federal polity. Western Australia, South Australia and Victoria, Melbourne's state of location —supported Melbourne. However, New South Wales (the largest colony) and its neighbouring northern state, Queensland, favoured Sydney. Perhaps one or another of the two colonial capitals might have eventually been acceptable to the smaller states, but the Sydney–Melbourne rivalry was such that neither city would ever agree to the other one becoming the capital.