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SALIENT FEATURES OF THE AUSTRALASIAN DEMOCRACY

Indirect effects of the discovery of gold—Causes of the financial crisis—The origin and extent of State Socialism—The thriftiness of the working-classes—Labour Representation in Parliament—Parliamentary Government—Direct Taxation—Conciliation and Arbitration in Industrial disputes—Protection and its corollaries—The feeling towards Great Britain—General conclusions.

The enormous immigration of the fifties, due to the great discoveries of gold in Victoria and New South Wales, has caused Australia to become one of the most democratic countries in the world. Before that time the soil was held in large areas by pastoralists who, in the absence of opposing forces, would have formed themselves gradually into a strong landed aristocracy. But the miners, a class of men who had shown their energy and determination by their readiness to travel thousands of miles in the search for wealth, introduced an entirely new element: they had thrown off their traditionary reverence for vested institutions, they were able to earn high wages or directly to enrich themselves, and they resented an assumption of superiority on the part of any section in the community. When, in the course of years, the mining industry began to wane, they swarmed into the towns and constituted an important link in the chain of causes which has swelled some of the capitals to their present unwieldy dimensions. Deprived of their means of livelihood, and indisposed for rural life, they clamoured for other employment, and were able, in several Provinces, to induce the Ministry to impose a protective tariff which artificially fostered the growth of manufactures. The protective tariff naturally increased the urban population, as did the undiscriminative system of State-aided immigration, the centralisation of all departments of the Government, and, in its ultimate effects, the construction of public works.

In a population of pastoralists and miners, engaged in pursuits which inculcate reliance upon individual efforts, it is somewhat strange to note the early development of a tendency towards State socialism; but I am inclined to think that, in this respect also, the discoveries of gold exercised a permanent influence, not only in the Provinces immediately affected, but throughout Australasia, from a tendency towards imitation. In the first years of Responsible Government British capitalists had a natural distrust of Australian securities, and declined to advance money except at a high rate of interest. But when they saw the phenomenal increase in the yield of gold, and the large revenue obtained from the sale of lands, they overcame their scruples and displayed, during the twenty years which preceded the financial crisis, a readiness to grant loans to the several Governments which is believed by many to have been a great misfortune to their debtors.

The political and unremunerative railways of Victoria, which have been discussed in the chapter dealing with that Province, could not have been constructed but for the easy access to large funds. Another aspect of the question has been emphasised in an article published by the Sydney Bulletin¹⁶ which, however much an Englishman may demur to its Republican principles, must be admitted to be an authority on Australasian topics. A strong plea is put forward for the necessity of defining by Act of Parliament what kind of works should be charged to loan-moneys, and what should be charged to revenue. The advantages, it is contended, will be threefold; the attention of the country will be drawn to the matter; the Loan Estimates go through so rapidly that very few people are aware how the thing is worked. The lender will know the destination of his money, and all treasurers will be placed on a level, whereas, at present, "the dishonest treasurer who makes a surplus by using borrowed money for road repairs and all manner of other ordinary expenditure is a heaven-born financier, while the honest one who doesn't is driven out of office, either for having a deficit, or for increasing taxation, and is a failure either way." Official figures are quoted for New South Wales in order to prove that during the years 1885-1890, which covered the flotation of several loans, surpluses and deficits alternated as the treasurer was or was not able to dispose of borrowed funds. Indirectly, of course, many of the public works which do not produce a direct revenue may be of financial benefit to the State, through an increase of population and the encouragement of settlement; but it is a hazardous principle to borrow money for their construction.

Equally dangerous for Australia was the more recent excessive eagerness of the British capitalist to invest his money in Australian commercial undertakings, as, according to the Victorian Year Book,¹⁷ a publication of the highest merit, "there is no doubt that the feverish financial activity that preceded, and ultimately led to, the Australian financial crisis primarily arose from the enormous influx of British capital—far in excess of the legitimate requirements of the Colonies—for remunerative enterprises. This influx was probably the result of the large amount of attention that for some years prior to 1888 had been directed to these Colonies, which were brought into prominence by such events as the passing of the first Federal Council Act by the Imperial Parliament in 1885, the Colonial and Indian Exhibition held in London in 1886, and the Imperial Conference in 1887; it was also much stimulated by the lowering in 1888 of the interest on the British Public Debt, and pro rata on other first-class British securities. The first indications of this were noticeable in the marked rise in the prices of all Colonial Government securities which occurred just after Mr. Goschen's notification of his scheme for reducing the interest on the National Debt of the United Kingdom, in March, 1888. Such securities, however, being of limited extent, the superabundant capital was forced into private channels, which led to the growth of co-operative enterprise on an unprecedented scale—through the medium of joint stock companies—which commenced prior to, but probably in anticipation of, the conversion of the British Public Debt, and culminated in the United Kingdom, as well as in Australia, in the same year. Owing to this increasing competition for Colonial Government securities, and the consequent fall in the rate of interest thereon, the Colonial Governments were tempted to, and no doubt did, borrow in excess of their immediate requirements, although this was not recognised during the period of general inflation; but assuming a portion of the Government loans to have been unjustified, far worse was the condition of the large private investments, chiefly in joint stock companies, many of which supplemented their resources by deposits—equivalent in some cases to as much as three times the paid-up capital—which had been drawn, by reason of the high rates of interest offered, from all sections of the community, both in England and Australia. Between the 1st of January, 1887, and the 30th of June, 1893, but for the most part in 1888, 1,154 companies with a paid-up capital of no less than £28,436,500 (subscribed capital £54,300,000) were registered in Victoria alone, and of these, 397, with a paid-up capital of £9,469,000 (subscribed capital £19,526,000) are known to have become defunct, to say nothing of numerous others, of which no information has been furnished to the Registrar-General." The crisis was most acute in Victoria, but its effects were felt largely, and are still felt in calls upon shareholders, in other Provinces. In conclusion, while British capitalists are still chary of industrial investments, they appear to be willing to meet the Australasian Governments in their resumption of applications for loans.

The danger is accentuated by the tendency towards State socialism, the origin of which I had begun to discuss before this long digression. The earliest concessions for the construction of railways were granted in New South Wales in 1848 and 1853, but the companies were unable to carry out their undertakings, owing to the scarcity of workmen caused by the rush to the goldfields, and the Government stepped in and completed the railways out of public funds. This assumption by the State of a function which had been delegated to private enterprise, coupled with the growing confidence of the British investor and the elasticity of the revenue, both from the Customs and from the disposal of land, which had been accelerated by the rapid increase of population, appears to have convinced the political leaders of the advisability of the Governmental extension of the railway lines. They were enabled to carry out this policy without difficulty, as the bulk of the electors were engrossed in material pursuits and did not trouble themselves about political issues. In Victoria three short lines of railways were constructed during the fifties by private companies, but were subsequently purchased by the Government, which thenceforward monopolised the construction of new lines. Why Victoria and the other Provinces should have decided in favour of State ownership and management of railways I am unable to explain, except upon the hypothesis that they were influenced by the example of New South Wales, that they wished to open up the country more quickly than would otherwise have been possible, and that they were tempted by the funds at their disposal in surpluses of revenue over expenditure. Then, the railways having in many instances preceded population, it was necessary, if the lines were not to be unprofitable, that special steps should be taken in order to promote settlement. This was done, partly by the offer of land upon favourable conditions, partly by the payment out of the National Exchequer of all the expenses of Local Government. In New South Wales this state of things still prevails in many of the rural districts; in the other Provinces pro rata subsidies are paid to the Local Authorities, but are limited, in some cases, to a fixed term of years. The Local Bodies have had no spontaneous evolution; they are the creation of the Central Government, they are supported and controlled by it, and look to it for assistance whenever they are in financial difficulties. It would seem that, accustomed to State railways and to dependency upon the State in their local affairs, Australasians have been led insensibly to magnify the efficacy of its intervention and to welcome every enlargement of its sphere of action. The protective tariff appears to have had a similar effect, unless it is to be regarded as a mere coincidence that South Australia, New Zealand, and Victoria, which alone are avowedly Protectionist, have authorised the widest extension of the functions of the State.

Throughout Australasia all parties in the several Parliaments are agreed on the principle of the State ownership of railways. In Victoria and Queensland the railways are entirely in the hands of the Government; in New South Wales and South Australia they are so with some trifling exceptions; in Tasmania, Western Australia, and New Zealand a few private lines have been authorised because it has been advisable, in the interests of settlement, that they should be constructed, and the Governments have been unable or unwilling to undertake further financial obligations. The recent action of Western Australia may be mentioned in evidence of the prevalent feeling, it having taken advantage of its improved credit to purchase one of the private lines. The waterworks of the capitals, also, are national or municipal property; but other municipal monopolies, such as gasworks and tramways, are mostly in the hands of private companies.

The railways of Australasia are worked, as far as is consonant with national interests, for the direct benefit of producers, who, as has been seen in the chapters dealing with individual Provinces, have been the special object of the paternal solicitude of their Governments. The various efforts in this direction may briefly be recapitulated. South Australia, Victoria, Western Australia, and New Zealand make advances to settlers at low rates of interest; South Australia sells its wines in London; Queensland facilitates the erection of sugar mills, and is proposing to establish depôts in London and the provinces for the receipt and distribution of its frozen meat; Victoria and South Australia have given a bonus upon the exportation of dairy produce. These Provinces and New Zealand receive such produce, grade and freeze it free of charge or at a rate which barely covers the expenses. Victoria has given subsidies towards the erection of butter factories; Victoria and New Zealand have subsidised the mining industry; and Western Australia has adopted a comprehensive scheme for the supply of water to the Coolgardie Goldfields.

The above brief summary shows that action by the State for the promotion of enterprise has met with approval in Queensland and Western Australia as well as in the Provinces which have adopted the widest extensions of the franchise. It maybe noted, however, that Sir Hugh Nelson, the Premier of Queensland, is an individualist at heart, and consents to extensions of the functions of the State unwillingly upon a conviction of their necessity; while, in Western Australia, Sir John Forrest is a strong advocate of State socialism, and opposed to private-enterprise in any matter which is of the nature of a monopoly. New South Wales and Tasmania have not hitherto followed the lead of the other Provinces. This tendency is one of the most marked of recent years, and received a strong impetus from the financial crisis of 1893, which burst the bubble of a fictitious prosperity and compelled attention to the strenuous development of the resources of the soil. It is likely to lead to closer relations between the Provinces, from the appreciation of the fact that the exports of one Province, if unregulated and allowed to fall into disrepute, may prejudicially affect the interests of the whole continent.

As regards the intervention of the State in the direction of industrial legislation, the Governments of Western Australia and Tasmania have had little cause to take action, in the absence of crowded centres and of manufacturing activity; but New South Wales, Victoria, Queensland, South Australia, and New Zealand have placed stringent Factory Acts upon their Statute Books. Measures have also been passed, largely under the influence of Labour Representatives, dealing with the liability of employers, the regulation of mines, the protection of shop assistants, and other matters affecting the welfare of the working classes. Upon their enactment complaints have been made of undue interference with employers; but the administration is now, in most cases, carried out efficiently and without unnecessary friction.

Indirectly, the various Provinces have, through their schemes of public works, exercised considerable influence upon the demand for labour and have, upon the completion of the more important undertakings, been subject to continual pressure with the object of inducing them to authorise special works for the benefit of those who have been deprived of their livelihood. New South Wales, indeed, and, to a lesser extent, Victoria, have almost admitted an obligation to provide work or rations for the unemployed. In Victoria the tension has been relaxed by the formation of the Labour Colony of Leongatha, at which the destitute can obtain temporary subsistence. Australian politicians, generally, were appalled by the undeserved misery which resulted from the cessation of public works and from the financial disturbances, and, under the stress of humanitarian motives, failed to temper their humanity with discretion, and initiated a policy of indiscriminate assistance from which, once entered upon, it has been difficult for them to draw back. The formation of village settlements in all the Provinces except Western Australia was based upon the necessity for special efforts in the face of the prevailing distress. Australians have never been able to regard the unemployed as a necessary factor in their economic system. The ordinary problems of pauperism have been felt acutely in Australasia and have been met in somewhat similar fashion in the different Provinces. Destitute children are, in most cases, boarded out; the aged and incapable are provided for in Benevolent Asylums. In Victoria, New South Wales, and New Zealand a movement has recently arisen for the adoption of a system of old-age pensions, which has had no appreciable results in the former Province, but has led in New South Wales to the appointment of a Parliamentary Committee which reported favourably and suggested forms of additional taxation by which the necessary funds might be obtained, and in New Zealand to the introduction of a Ministerial measure which sought to establish the general principle and left to the House the elaboration of the financial details. The Bill was accepted on its second reading, but in Committee an amendment was carried against the Government to the effect that all persons above the age of sixty-five, irrespectively of their means, should be entitled to receive a pension. An Act was, however, subsequently passed of which the object is to ascertain the probable cost of a pension fund. All persons of the age of sixty-five and upwards, who have resided in the Province for twenty years, imprisonment being reckoned as absence, and are not possessed of an income exceeding £50 a year, are entitled to apply for a pension certificate which will be issued to them upon the verification of their claims, and will be regarded as conclusive if a pension fund be established hereafter. The success of the Government at the recent elections renders it probable that the matter will shortly receive attention. In neither of the Provinces in which the subject has been discussed is it proposed that the pension should be earned by previous contributions; it is to be offered as a free gift in recognition of the services which every worker must have rendered to the community.

To conclude a superficial summary of the functions undertaken, or likely to be undertaken, by the State in Australasia, it may be mentioned that the State system of primary education is in all the Provinces compulsory and undenominational. In South Australia, Victoria, Queensland, and New Zealand it is also free; in the other Provinces fees are charged but may be remitted, wholly or partly, in the case of the inability of parents to pay them. There are no signs that the advocates of grants in aid of denominational education are gaining ground; in the direct reference to the electors taken in South Australia they were defeated by a large majority, and have equally little chance of securing subsidies to religious bodies.

In the presence of great activity on the part of the State, it is interesting to note to what extent the working classes have exerted themselves on their own behalf. Distributive co-operation has not become popular owing, partly, according to the Australasian,¹⁸ "to the vicissitudes in trade which are inseparable from new countries, and to the temptations which are consequently held out to the workers from time to time to change their occupations and abodes. Partly, too, an explanation may be found in the efficacy of existing agencies for distribution. But we cannot help thinking that it is due also, in part, to the pernicious ideas which lead so many of our artisans to cry out against capital, and to seek the aid of the State, instead of trusting to their own efforts and determining to become capitalists themselves in a way which has been proved by the co-operative societies at home to be thoroughly practical." Though the Australasian is strongly individualistic in its bias, it appears to be justified in its reference to a certain lack of initiative shown by Australasian workmen; they are inclined to look upon the State as a gold mine from which they can draw permanent dividends, especially as they are scarcely, if at all, affected directly by the periodical calls upon the shareholders; but, in his strictures upon the attitude of labour towards capital, the writer should have added that the wealthy classes are at least as ready to misjudge every effort made by the Labour Representatives to pass remedial measures through the legislatures. Proceeding to deal with the co-operation of producers, he says that "there is co-operation of this kind already in our butter and cheese factories, where the farmer who conveys his produce to the factory may also be a shareholder, and at the end of the half-year may receive a dividend on his shares and a bonus on the milk supplied, in addition to the established price. Co-operation of a like kind prevails, to some extent, though not so largely as might be desired, between the graziers and the companies for the export of Australian meat." These remarks, which refer primarily to Victoria, are generally true of Australasia.

But, while the working classes look constantly to the State for assistance in various forms, they can be shown to have made considerable provision against the future. In spite of bad times, the number of depositors in Australasian Savings Banks rose from 742,000 in 1891 to 895,000 in 1895, and the total amount of deposits from 19 to 26 millions. Victoria and South Australia, which are followed closely by New Zealand, have the largest number of depositors in proportion to population, 29 and 24 per 100 respectively, and Queensland and New South Wales the highest average amount of deposits.¹⁹ In the three Provinces, therefore, in which the paternal action of the Government is carried to the furthest extent, we find the widest diffusion of an important exemplification of the spirit of thrift. I am far from suggesting a relation of cause and effect, as the amount of savings must depend largely upon the rate of wages, the abundance or scarcity of employment, the cost of living, and many other factors, and would merely point out that the policy in question does not appear to have deterred the working classes from individual efforts.

As regards Friendly Societies, South Australia takes the lead with a membership exceeding one in ten of the population; Victoria comes next with one in fifteen, and is third in the average amount of funds per member. Under the latter head New Zealand occupied the first place with £18 8s. 2d., and is followed by Western Australia with £17 10s. 4d., but the latter amount is of no comparative importance owing to the very small number of subscribers.²⁰

In 1895 the average amount of assurance per head of the population in Australasia was £20, the average sum assured per policy £285, and the average number of policies per 1,000 of the population, 70. Compared with the United Kingdom, Australasia has a considerable advantage in the first of these figures, has the proportion reversed in the second, but wins by more than two to one on the last, which is the most interesting as a further indication of the prevalence of the instinct of providence among Australasian workmen.²¹ Prior to the recent crisis the working classes had availed themselves largely of the opportunities which Building Societies offered to them to secure the freehold of their homes by payments spread over a term of years; but a run upon the deposits lodged in these institutions, which set in towards the end of 1891, and continued during 1892, affected them disastrously, and the large majority of even the soundest of them were obliged eventually, owing to the heavy withdrawal of deposits, to close their doors. Though some have since been re-opened, upon terms agreed to between the shareholders and depositors, their business has collapsed for the time, the amount of advances in Victoria having fallen from over two millions in 1890 and in 1891 to less than a hundred thousand pounds in 1893.²² In the apparent absence of statistics of the number of freeholders in several Provinces, no general idea can be formed of the extent to which the working classes have, through Building Societies and otherwise, invested their savings in the acquisition of freehold properties. The only figures that I have been able to obtain give the estimated number of owners as 30,600, 91,500, and 184,500 for New South Wales, New Zealand, and Victoria respectively. As far as the two latter Provinces are concerned, the total populations being only 699,000 and 1,174,000, it is absurd to suppose that the electors, a large proportion of whom are freeholders, will be captivated by the advocates of the Single Tax. It cannot too often be repeated that the Australasian Governments, all of which are, to a greater or lesser degree, aiming at the multiplication of small owners or perpetual lease-holders, are rendering it practically impossible that an agitation for the confiscation of land values should be successful, and are fostering the growth of that class of settlers which is believed to be Conservative in the best sense of the word. But large estates, except in the case of certain kinds of pastoral land, are doomed to extinction, either in the natural course of events, owing to the costliness of labour, or from the pressure of heavy graduated taxation, the workmen of Australasia being thoroughly convinced of its justice as a means of raising revenue and of its efficacy as a means of causing land to be subdivided or placed upon the market. They have also, as has been seen, supported legislation which has authorised the re-purchase and subdivision of landed estates.

Lastly, they have realised since 1890 that, for the furtherance of their aspirations, the strength of their Unions should be devoted mainly to the promotion of the representation of Labour in Parliament. The great strike of that year has been described so fully that it is unnecessary to say more than that a strong combination of labour, which had made itself master of the situation, was confronted upon the outbreak of hostilities by rapidly organised but powerful associations of employers; that the struggle, which spread over the whole Continent and New Zealand, terminated in the success of the latter, and that the workmen realised that, even had they succeeded, the victory would have been won at too heavy a cost in the misery entailed upon themselves and their families. Many of them were dissatisfied with the generalship of their leaders during the strike, and realised that the exhaustion of their funds rendered them unable to engage again in a huge industrial struggle. In the following years low prices, the financial crisis, and the consequent scarcity of employment and fall in wages, further weakened the Unions and intensified the conviction that strikes should be superseded by the ballot-box. In some Provinces, also, it was felt that the rivalry of parties had degenerated into a contest between the ins and the outs, and that progressive measures would not be passed until Labour had entered as a compact body into the arena.

I have discussed in the earlier chapters the history and results of Labour representation in several of the Provinces, and have shown that the Labour Party has been successful in South Australia, where it has formed an alliance with the Government, though maintaining a separate organisation, and in New South Wales, where it has held the balance of power between the Protectionists and Free Traders, but has failed utterly in Queensland, where mainly through its own fault, but partly through the astuteness of its opponents, it has occupied a position of antagonism to all the vested interests of the community. In Victoria the Labour Party acts usually with the Government, but seeks to obtain its objects by the exercise of its strength more than by friendly negotiations. In New Zealand no distinct Party was formed, but the working-men representatives threw in their lot with the Government and, by consistent support, helped to secure the imposition of graduated taxation and the enactment, among other measures, of a compulsory Conciliation and Arbitration Act, and of a large number of Industrial Statutes.

A great similarity of aims and aspirations can be traced between the different Labour Parties if we ignore side issues and exclude that of Queensland, which is affected by the taint of aggressive socialism. Judging from the respective programmes and from conversations which I have had with many of the leaders, I find that, subject to certain exceptions which I shall mention, they are united upon the following propositions:—

Manhood or adult suffrage, shorn of the plural vote, should be the basis of representation in the Assembly. The Legislative Council should be abolished, as it prevents the wishes of the people from being carried into effect.

Direct taxation should consist of graduated death duties and graduated taxes on incomes and land values.

Parliament should secure to every worker for wages sanitary and safe conditions of employment, and immunity from excessive hours of labour.

Machinery should be provided by Parliament by which industrial disputes may be referred to an impartial tribunal.

The workers should protect themselves not only against foreign goods, but against undesirable immigrants, whether they be Orientals or indigent Europeans.

The consideration of these questions, and of the wider issues with which they are concerned, will cover most of the points of recent interest in Australasian politics.

(1) It is doubtful whether Responsible Government, in the sense of government by a Ministry which carries out a definite policy approved by the country, and, in return, receives allegiance from its supporters in Parliament, has ever been acclimatised in Australasia except in New South Wales under the influence of the late Sir Henry Parkes. How, indeed, could it be otherwise, when it was sought to transplant a delicate system, hallowed by conventions and dependent for its success upon the election of a special class of representatives, among a community necessarily ruled by men who had little experience of public life? Australian Parliaments, save on the rare occasions when some important issue, such as that of the tariff, has come to the front, have not been divided on ordinary party lines, and have amused themselves with the excitement of a constant succession of new Ministries selected on personal and not on political considerations. New South Wales, South Australia, and Victoria, to take three Provinces at random, have had, respectively, 28, 42, and 26 Ministries in 40 years. The policy of the Opposition has often been almost identical with that of the Government. Again, coalitions between former opponents have been of frequent occurrence; the Ministries formed by Messrs. Deakin and Gillies in Victoria, and by Sir Samuel Griffith and Sir Thomas McIlwraith in Queensland, are recent instances of this tendency. In some rural constituencies, also, candidates appeal to the electorate on personal grounds and are not required to declare their adhesion to a party. I was struck, when present at the elections in South Australia and New Zealand, by the subsequent animated discussions in the newspapers as to the probable effect of the changes in the personnel of the Members upon the prospects of the Government. This is the more noticeable from the fact that the freedom of action allowed to representatives has been curtailed since the return to Parliament of Labour Members, who are pledged to a definite programme and have put forward questions on which there is a distinct line of cleavage. Proposals for the extension of the franchise, for the abolition of the plural vote, or for the imposition of a tax on incomes and land values, are such as divide the electorate into two camps and perpetuate the division in the House. This state of things, combined, perhaps, with the financial crisis which raised problems demanding continuity of administration for their solution, has contributed to the greater stability of Ministries. Another factor, which has given constituencies a greater hold on their representatives, and has tended thereby to make them adhere more closely to one or other of the parties, is the payment of Members, which has now been adopted in all the Lower Houses except that of Western Australia, and in the Upper Houses of South Australia, Tasmania, and New Zealand. Australia has been confronted with the difficulty experienced by every young country, that the men who should naturally enter Parliament are prevented by commercial or professional duties from devoting the necessary time, and that, in the absence of men of leisure, constituencies are much hampered in their choice of candidates. The payment of Members, it is needless to say, offers no inducement to the successful merchant or lawyer, but has increased the competition among men to whom the salary is an inducement. My inquiries as to its effect upon the tone of politicians have elicited mutually contradictory replies. On the one hand I am assured that the attractions of the salary have led men to resort to disreputable practices in order to be selected as candidates and to seek to retain the fickle affections of their constituents by similar means; on the other, that necessitous Members have been raised by the salary above temptations which their poverty made it difficult for them to resist; and such temptations must increase in number with each extension of the functions of the State unless it be dissociated from political influence. It is clear that a knowledge of the inner life of a Parliament could alone supply materials for the adequate discussion of this question, and that a similar consideration applies to the discussion of the effects of State socialism upon political morality. The possible abuses are many: railways may be constructed with a view to popularity; the rents of Crown tenants may be remitted, and borrowers may be allowed to fall in arrears with the interest on their advances; subsidies and bonuses voted by Parliament may be misapplied; and the unemployed may be conciliated by unnecessary public works. Personal corruption, I am confident, does not exist, but that safeguards have been felt to be necessary is proved by the appointment of independent Railway Commissioners by New South Wales, Victoria, South Australia, Queensland, and New Zealand, and of Public Works Committees by Victoria and New South Wales. In the latter country, as has been seen, the Commissioners have been most successful, but New Zealand has reverted to the system of political control, and Victoria, Queensland, and South Australia have reduced the number of Commissioners from three to one. This change, which must have lessened the efficacy of non-political control, was advocated on grounds of economy at a time when all forms of expenditure were being cut down to the lowest point. In Victoria the Leongatha Labour Settlement has diminished the difficulties connected with the unemployed, and its administration has been studied by the other Provinces with a view to similar action. The general political tone is healthy, and is stimulated, in all the Provinces, by a high-class press, which uses its great influence in a conscientious manner. But, as long as Treasurers can balance their accounts by recourse to loans, and are tempted, as is inevitable, to apply borrowed money to placatory enterprises, the dangers which are necessarily connected with State socialism are multiplied tenfold. They would be lessened if the objects for which loans might be contracted were defined, as has been suggested, by Act of Parliament, or if Federation were to eventuate at an early date and the right to borrow were limited to the Federal Authority.