The first Steam Packet Hotel was situated in Scott street, Newcastle. Old Newcastle resident George Priest in recalling Newcastle of the 1840s and 1850s stated that On the opposite side of the present site of the Great Northern Hotel, were a few dilapidated buildings. An hotel was erected there afterwards, and was called the Steam Packet Hotel. It was conducted by a man named Harry Williams. It caught fire..... Later he built a hotel at the corner of Hunter and Newcomen streets, and that was also called the Steam Packet. The fire mentioned above occurred in July 1862 and Henry William's young daughter was killed.
The site of the new Steam Packet on the Eastern corner of Hunter and Newcomen Streets, was the same allotment or close to, that of the Australian Inn. - See Map of Newcastle.
Adjoining the Hotel was the residence of Thomas Buxton, and at the rear of those properties was a spring known as the Water Reserve. It was from this spring that the residents of early Newcastle secured their water supply.
Carts and barrels went in from Hunter Street by a narrow lane at the side of Buxton's property and when barrels were filled, continued along the lane and came out in Newcomen Street at the rear of the Steam Packet. 
Great Fire in Newcastle 1881
The destruction of the Hotel by fire was described in the Australian Town and Country Journal in September 1881 -
Great Fire in Newcastle.
An alarming fire broke out in Hunter-street just
before 2 o'clock this morning. The fire first
appeared in a wooden store, occupied by Richard
Moore, linen draper. Drs. Page and Cusifage,
with Mr. Whistler, were passing, and saw flames
bursting out of a doorway, and they broke it open
The firebell was rung, and the signal gun fired.
Sub-inspector Thorpe, Sergeant Conway, and a
large body of police were on the spot quickly, but
the flames caught the adjoining houses, namely :
Steam Packet Hotel on the west side of Newcomen
Street, and Mrs. Buxton's premises on the east.
It was more than an hour before the engines were
brought to play, and by that time the fire had
got a firm hold of the adjacent premises, which
are now completely gutted. The walls only are
standing. The fire is still smouldering. The
general impression is that the hotel and Mrs.
Buxton's house used as a tobacconist's and barber shop could have been easily saved if the
engines had been available ; but it was the old
story - insufficient hose, want of water, and on
this occasion want of willing hands. The police
constables had to man the engines. The scandalous want of proper fire brigade appliances is a
disgrace to Newcastle. Had there been the least
wind it is impossible to tell where the fire would
The Steam Packet Hotel is said to
be insured for £1000 in the United Insurance Co.,
the stock and furniture being covered in the Victoria Insurance Co. The adjoining cottage, utilised as a dining-room in connection with the
hotel, was insured in the Australian Mutual
Society for about 200 pounds.
The occupier; of the drapery store and the
adjoining tobacconist's shop, Mr. Richard Moore,
denies that the fire originated in his premises;
but the constable then on duty states that he
saw smoke forcing its way through the shingles
of Moore's store, and on endeavouring to break
in, found the whole of the shop filled with
dense smoke and flame, and he then gave the
alarm by getting the firebell rung. Moore
says there has never been any light in the
drapery store except gas, and that he saw turned
off himself before he went out at half-past 9
o'clock. The fire broke out at half-past 1 next
morning (Saturday.) The few members of the
Permanent Artillery worked well at the big engine
near the wharf, which is 1000 feet at least from
the scene of the fire. 
Notes and Links
(1) An earlier version of the hotel can be seen here. Edward Hill, the name on the front, was publican at the Steam Packet in 1870-1871. By 1873 he had moved to the White Horse Inn in Darby Street and James Walker held the license for the Steam Packet from 1873. Gas street lighting began in 1875
Many years later the Council erected Corporation Baths on the site of the spring.
This Photographis taken from Hunter looking down Newcomen, The Crystal Palace Hotel is on the left, and the Mercantile Bank of Sydney (site of The Steam Packet Hotel) on Right. The Corporation Baths with the sign 'Newcastle Swimming Club', is next door to the bank (Photo R. Snowball)
 Gould, W.J., Newcastle and Hunter District Historical Society Journal and Proceedings, Volume 1 1847