Contains the first chapter of The Dream and the Reality, an unpublished literary work by John McLaren on the study of the realist tradition in Australian fiction. The purpose of McLaren’s study is to explore the attitude of Australians to their country which has always been ambiguous and show how some Australian fiction writers reacted to this particular experience and environment, how they have treated the dream and how they have dealt with reality.  In this chapter McLaren reviews the literary works of Marcus Clarke, an Australian novelist and poet, and in particular his novel For the Term of his Natural Life, which depicts the harsh and inhumane treatment of convicts. It is irrelevant whether Clarke saw his work as a complete account of life in Australia or whether he was deliberately confining himself to an exploration of the nature of the convict system, just as it irrelevant to ask whether the picture is historically accurate. The important fact is that it is the convict element of Australian life which evokes Clarke’s major work of the imagination, whose gloom stands in such contrast to the conventional Australian legend of resilience, humour and optimism.