Our First Half-Century Part 7

Mr. Kidston then became Premier. On the 11th of April, 1907, the a.s.sembly's term having almost expired by effluxion of time, a dissolution took place, and a general election followed. The two chief objects for which the coalition between Liberals and Labour members had been brought about in 1903--sound financial administration and electoral reform--having been secured, disintegration had commenced to set in in the Government ranks. On the one hand some of the Liberals were desirous of reunion with their former a.s.sociates led by Mr.

Philp, and on the other the more extreme section of the Labour party adopted a socialistic platform, thereby causing their more moderate colleagues who followed Mr. Kidston to break with them before the election. The respective manifestoes of the Premier and the leader of the Opposition, issued some weeks before the dissolution, were found to embody practically the same policy in so far as vital measures of legislation were concerned. Both emphasised the necessity of having in office a Ministry possessing the steadfast support of a united following if full effect were to be given to their programme. The result was disappointing, for when the new House met in July the Philp party numbered 29, the Government party 25, and the Labour party 18. After a fight over the choice of the Speaker and Chairman of Committees, the Labour members gave a general support to the Government, but comparatively little progress could be made in consequence of the uncertainty of that support. The Legislative Council rejected several measures which both the Government and the Labour party were very anxious to see placed on the Statute-book. With a view to taking concerted action to overcome the veto of the Council on democratic legislation, Mr. Kidston made overtures to the Labour party for an offensive and defensive alliance in Parliament and at the polls. The Labour party replied that they were unable to give any a.s.surance on the subject. Mr. Kidston then advised His Excellency, Lord Chelmsford, to recognise the principle that there resided in the Crown the power to nominate to the Legislative Council such a number of new members as might be required to overcome obstruction, and that the power should be exercised if, in the opinion of His Excellency's responsible advisers, such a course became necessary. The Governor declined to accept this advice, and the Premier resigned on 12th November.

[Ill.u.s.tration: ROCKHAMPTON 1. Quay Street, from the North Side.

2. Custom House, Quay Street. 3. East Street.]

Mr. Philp, being sent for by His Excellency, formed a Ministry, which was at once met in the a.s.sembly by successive votes of want of confidence, the members of the Labour party uniting with the late Ministerialists in the divisions. A dissolution was granted, even though the House refused to vote Supply to the Government, and early in the new year (1908) a general election took place, Mr. Philp losing four seats, the Labour party gaining that number, while the Kidston party were again returned with the same following. The effect was that the Philp and Kidston parties each numbered 25 and the Labour members 22. As the two latter parties had in most cases a.s.sisted one another at the elections, the Philp Government resigned, and Mr. Kidston being recalled found his position practically unchanged, so far as relative numbers were concerned, and yet greatly strengthened as regards the const.i.tutional reform he desired to effect. A short session was at once held. A reform of the Const.i.tution limiting the vetoing power of the Legislative Council by providing for a referendum on any measure which the Council rejected twice, and also a number of democratic measures rejected by the Council in the two preceding sessions, were pa.s.sed with the aid of the Labour party. When, however, the Government turned to legislation affecting the material progress of the State, and introduced two bills to authorise the construction of railways to mineral fields (to Mount Elliott in the Cloncurry copper area and to Lawn Hills in the Gulf district) on agreements made with two private companies who undertook to provide in one case one-half and in the other case three-fourths of the capital required, despite the fact that the railways were to be constructed, worked, and managed by the Railway Commissioner, that the companies were to receive no interest on the money they advanced until the railways earned it, and that when at the end of fifteen years the Government repaid the advance the companies were only to receive a sum equal to what their investment was then earning capitalised at 3 per cent., the bills were obstructed by the Labour party, and were only pa.s.sed with the a.s.sistance of the Philp party, under the closure, the Estimates being forced through by the same means at the close of the session. Before leaving on a mission to England, Mr. Kidston publicly intimated that he could no longer work with the Labour party. He returned in October, and the Philp party, recognising the mischievous futility of three-party government, agreed to accept the programme enunciated by Mr. Kidston at the election in 1907, and to join the Ministerial party, the Premier being granted a free hand, both by his colleagues and followers, in reconstructing the Government.

The fusion of the two parties led to the immediate resignation of two Ministers and the formation of an Independent Opposition by these gentlemen and four more seceders from the Kidston party. A reconstruction of the Cabinet followed, three members of the Philp party taking office under Mr. Kidston. Mr. Philp declined to accept a portfolio, but undertook to give the new Government support as an unofficial member of the a.s.sembly, an undertaking most loyally observed. Dissatisfaction was naturally felt by several members at the composition of the Cabinet, and when Parliament met on 17th November it was evident that the fusion had not had the desired effect of reducing the number of parties to two. On the Opposition side of the Chamber were the Labour party in direct opposition and the Independent Opposition of six sitting on the cross-benches, while on the Government back cross-benches were three or four members who joined forces with the Opposition in every division. The cohesive majority was still large enough to enable the Government to pa.s.s several railways, two or three bills, and the Estimates; but, unfortunately, it was found necessary to have recourse again to the closure to get the Estimates through the House before Christmas.

Further defections took place during the recess. The sudden death of the Speaker, Mr. John Leahy, and the election for Bulloo of a Labour member in his stead, reduced the Government majority to two. Such a condition of affairs rendered it impossible for any party in the House to carry on public business. A trial of strength took place over the election of a Speaker when the House met on 29th June, the Government having a majority of two. Two days later Mr. Bowman, the leader of the Labour party, moved a want of confidence amendment on the Address in Reply. A very protracted and acrimonious debate took place, and the motion was only defeated by a majority of one in a full House.

Arrangements had been made earlier in the year for the holding of a conference of Commonwealth and State Premiers and Treasurers with a view to making a final effort to arrive at a mutual understanding regarding the financial relations of the Commonwealth and the States after the expiry of the ten-year period provided for by section 87 of the Commonwealth Const.i.tution. As it was considered highly important that Queensland should be represented at this Conference, which was to be held in mid-August, the Government secured an adjournment for a fortnight, but only by applying the closure.

The Conference came to a unanimous agreement with regard to the future division of the surplus Customs and Excise revenue, justifying the determination of the Government of this State to be represented. But the efforts of the Opposition to defeat the proposal of the Government to adjourn furnished additional evidence, if any were needed, that no business could be done in a House so evenly divided. When the Premier returned from the Conference, which had been held in Melbourne, after consultation with his party, he advised the Lieutenant-Governor to dissolve the a.s.sembly, provided it agreed to grant temporary Supply.

His Excellency accepted Mr. Kidston's advice, but stipulated that the Supply must be for the shortest time in which it was possible to hold an election and summon the new Parliament. After another fight, the Government closured through an Appropriation Bill covering Supply for ten weeks, and the House was dissolved on 31st August, the election being fixed for 2nd October.

The result of the appeal to the country has been to bring about a practical restoration of two-party government, an ideal for which the Ministerialists have been striving ever since the session of 1906.

The Government have won 41 seats and the Labour party 27, while the Independent Opposition, which went out 12 strong, have been reduced to 4. The Government have thus a majority of ten over the combined Opposition parties, and should be able to carry to a successful issue their policy of railway construction, immigration, and land settlement, and to steer the State through the temporary difficulties arising from the pending rearrangement of the financial relations between the Commonwealth and the component States.

It may be of interest to add that the last was the seventeenth Parliament of Queensland, which gives to each an average of about three years, the present maximum statutory term of the Legislative a.s.sembly. The explanation is, of course, that in the earlier years of the colony the limit of the a.s.sembly life-term was five years.

As already stated, the Legislative Council when first const.i.tuted comprised 15 members. Since then the number has been periodically increased to correspond with the enlargement of the other Chamber. The present number of members of the Council is 44. Until 1865 the number of members of the a.s.sembly was 26; thence till 1873 it was 32; thence till 1875 it was 42, increased in 1875 by the creation of the electorate of Cook to 43, at which number it remained until 1879, when there were 55 members. In 1886 the number was increased to 59, and in 1887 to 72, at which it still remains. Payment of members of the a.s.sembly was first sanctioned in 1886 by an allowance of two guineas a day for attendance, and 1s. 6d. a mile for travelling expenses, the total in any one year for attendance not to exceed 200. In 1889 the payment was fixed at 300 a year, with a mileage allowance for one journey to and fro each session, unless where an adjournment exceeded thirty days, when mileage was again payable. In 1892 the salary was reduced to 150 a year. In 1896 it was again raised to 300, at which amount it still remains. The members of the Legislative Council receive no payment.

In the foregoing sketch of the Legislature of Queensland many omissions will probably be detected by the careful reader. But as a rule mention of the names of public men has had to be confined to Premiers and such other Ministers or members to whom for some usually apparent reason it is necessary to give prominence. Had s.p.a.ce permitted, many interesting character sketches of prominent men of the past, as well as of the present, might have been written; and it must not be forgotten that some of the services most worth recording have been rendered by men whose names have not become household words, and whose reward has been found in the lifelong consciousness that they have un.o.btrusively done their duty to the State. Enough has probably been said to prove that responsible government in Queensland, initiated among a mere handful of people fifty years ago, and carried on amidst discouraging difficulties until to-day, has been attended by results of which no patriotic subject of the King need feel ashamed.

[Footnote a: An interesting incident occurred at the opening of the second session. The Speaker announced the receipt of a writ of election endorsing the return of the Right Honourable John Bright as member for Kennedy. As Mr. Bright had not been present during the preceding session--which had only lasted from 26th April till 4th May--the seat was declared vacant.

This was not the first instance of an Australian const.i.tuency voluntarily disfranchising itself by electing a prominent British statesman by way of protest against some real or fancied injustice.]

[Ill.u.s.tration: TOWNSVILLE: FLINDERS STREET, LOOKING WEST]

CHAPTER II.

PUBLIC FINANCE (1859-1884).

Importance of Sound Finance.--A Great Colony Starts upon a Bank Overdraft.--First Year's Revenue.--Land Sales as Revenue.--Deficits in First Decade.--Transfer of Loan Moneys to Revenue to Balance Accounts.--Heavy Public Works Expenditure.--Crisis of 1866.--Inconvertible Paper Currency Proposals.--Flotation of Treasury Bills.--Higher Customs Duties.--Wiping Out a Deficit by Issue of Debentures.

--Transfer of Surplus to Surplus Revenue Account to Recoup Loan Fund.--Incidental Protection.--Railway Land Reserves.

--Proceeds Used as Ordinary Revenue.--Three-million Loan.

--Condition of Affairs at Close of First Quarter-Century.

--Phenomenal Progress; Prospects Bright.

Sound finance is the sheet anchor of any Government, whether despotic or democratic. Without a prudent guiding hand at the Treasury the s.h.i.+p of State might as well be rudderless. In the fifty years of Queensland history financial mistakes have been made, from which much public loss as well as individual suffering has resulted. If those mistakes, or some of them, are laid bare in this book, the object is not to reflect upon Governments or individual Ministers, but to treasure the lessons thus taught for future use.

Queensland began its career with a bank overdraft, for with "7d.

in the Treasury" on the date of the Queen's proclamation of the colony it was necessary to provide funds in antic.i.p.ation of revenue collections. But at the outset borrowing was indulged in on a modest scale. For 1860 the revenue was 178,589, and the deficit only 1,514.

For the second year there was a revenue surplus of 2,442 over the expenditure of 235,796. But there had been during the period an outlay of 63,210 on loan account. Besides this, of the total revenue for the two-year period--including the twenty-one days of 1859--the cash receipts from land sales, which strict political economists hold to be capital, were 114,803, equal to 27 per cent. of the total revenue. It may be a.s.sumed that the loan expenditure was entirely for permanent or reproductive works; but only 73 per cent. of the money spent for the service of the year was strictly revenue, the remainder arising from land sales. Yet as New South Wales practice had lent sanction to the use of land sales receipts as revenue, the Treasurer (Mr. R. R. Mackenzie) may be admitted to have managed well, since at the outset the estimates of revenue and expenditure were both wholly conjectural. Mr. Mackenzie's successors were less fortunate; for during the first decade, although the annual revenue had quadrupled, there were only two years with surpluses.

There was another scarcely defensible transaction during the first ten years' term. In 1864 the Treasurer, finding he would otherwise have a relatively heavy deficit, balanced his budget by transferring from Loan Fund to Revenue the total expenditure incurred upon immigration since the foundation of the colony. In that year the loan outlay was 401,421, including the transfer to revenue, an increase of 337,950 in a single year. Thus the loan expenditure was at the rate of about 5 10s. per head of the population as ascertained by the census of the year. The deficit of 1864 seems less excusable because the revenue had increased by over 25 per cent. for the year. The incident ill.u.s.trates the danger of suddenly increasing loan expenditure, which produces industrial and commercial activity, but at once adds to the cost of public administration in various ways. Loan money spent on the same scale per capita in Queensland to-day as in 1864 would mean a total sum of about 3,000,000 a year, whereas, even with the numerous railways lately started, the loan disburs.e.m.e.nts for 1908-9 did not quite reach 1 millions. Another consideration is that up to 1865 none of the loan works had become reproductive, and the 21 miles of railway then open for traffic did not earn working expenses. Further, the Government had been borrowing at 6 per cent. interest, which meant that the 1 millions of loan indebtedness at the end of 1865 imposed a burden upon the taxpayers of about 75,000 a year, or not far from 1 per head of the population.

In 1866, the time of the great crisis, the revenue expenditure increased by 241,690, creating a deficit of 200,653 for the year.

The loan expenditure for the year was 965,346, bringing the total debt up to 2,214,123, equal to over 23 per head of the population.

The total expenditure for the year, including loan, reached nearly 17 per head. It is not surprising that a mere handful of people, plunging into debt at that reckless speed, found their credit suddenly shattered. In 1869, the last year of the decade, though the revenue had advanced to nearly three-quarters of a million, there was a deficit for the year of 37,217. For the ten years the net acc.u.mulated revenue deficit was 386,527, and the aggregate indebtedness nearly 3 millions. The interest charge was then about 225,000 per annum, and the entire weight of it fell upon consolidated revenue. The population being 109,897, the interest burden was at the rate of over 2 per head. It may here be remarked that in 1907-8 it was only 2 16s. 9d. per head, less railway net earnings of about 1 12s., reducing the net burden to about 1 5s. per head. Recurring to the debacle of 1866, it should be mentioned that the catastrophe was largely due to the failure of the Agra Bank, when all railway works were suddenly suspended, and the colony was plunged into the depths of extreme depression. During the two preceding years the loan expenditure had been largely in excess of revenue disburs.e.m.e.nts, no less than 685,246 of borrowed money having been spent in 1865. This was at the rate of nearly 8 per head of the total population, and its sudden cessation threatened thousands of the people of the colony with ruin. For not only had their sources of income been suddenly cut off, and landed property become almost valueless, but increased taxation had to be imposed.

Yet the catastrophe was not wholly the fault of the Government. It was the consequence of the monetary and commercial crisis in the mother country in 1866. The Sydney branch of the Agra and Masterman's Bank had engaged to furnish 50,000 monthly to the Queensland Government for the prosecution of railways and other reproductive works pending the negotiation of the loan authorised by Parliament. The bank was of good standing, and under ordinary conditions its contract would have amply secured the position of the Treasury. Its failure could not have been foreseen; but the incident proves the unwisdom of a Government leaning upon any banking inst.i.tution for heavy advances which can only be made on the a.s.sumption that normal deposits are maintained.

In Queensland the position was intensified by the proposal of the Macalister Government to issue inconvertible legal tender notes, because it gave countenance to the economic fallacy that any Government can make money to an indefinable amount with the aid of the printing press. The resignation of Ministers because their advice had been refused by the Governor shook for the moment the very foundations of authority; and had not Mr. Herbert's services been available on the eve of his departure for England the consequences might have been grave indeed. But he consented to take office without portfolio for a few days with several other members, and, by getting authority from Parliament to issue Treasury bills, he saved the country from financial chaos. As it was, the ordeal proved a severe test of the loyalty of the people of the colony.

On the establishment of Queensland a Customs tariff imposing light revenue duties was inherited from New South Wales. Under it spirits bore a duty of only 7s. per gallon. In 1865 the Treasurer, Mr.

(afterwards Sir) Joshua Peter Bell, introduced a bill to raise the spirit duties by 3s. per gallon, and the duty on other intoxicants in proportion. The bill pa.s.sed the second reading without debate, for it must have been felt that with the rapidly increasing interest charge further taxation ought years before to have been imposed. After the crisis of 1866 had subsided, further increased duties for temporary purposes were pa.s.sed, as were also stamp duties, so that the revenue for the following year, despite the depression, showed the important increment of about 120,000. Happily the Crocodile goldfield, near Rockhampton, was discovered towards the close of 1866, and the Gympie goldfield during the next succeeding year. Hence for the remainder of the decade revenue, despite prolonged stagnation in business, steadily, if not rapidly, increased.

In 1869 authority had been obtained from Parliament to liquidate the acc.u.mulated deficits by the issue of Treasury bills for the sum of 350,000, the increased duties of Customs imposed for temporary purposes in 1866 being at the same time continued for twelve months.

In January, 1872, the Treasurer (Mr. Bell) referred in committee of the a.s.sembly to the acc.u.mulated deficit, stating that the Treasury bills which had temporarily provided for it were falling due, and that there was no hope of paying the amount out of revenue. He therefore announced the intention of the Government to retire the bills and fund the debt by issuing long-dated debentures. That having been done, the effect was to produce a surplus for the year 1872 of 487,333. This indicated that had the Government exhibited a little more confidence the whole amount of the deficit might have been paid off out of revenue; for in the next year, shortly before the Palmer Government went out of office, a further surplus of 158,874 was realised. This sum, with the excess surplus of 137,333 for the preceding year, totalled 296,207, leaving only 53,793 short of the entire amount of the Treasury bills. In the next year there would have been a surplus, but the Macalister Ministry, which a.s.sumed office early in January, 1874--Mr. William Hemmant being Treasurer--carried 240,000 to a surplus revenue account, and ended the year with a revenue deficit of 200,762. While the revenue of that year only increased by 40,913, the expenditure, in addition to the surplus revenue item, increased by 160,550. The Macalister Ministry could not keep down expenditure, and in 1875-6--the end of the financial year having been changed from December to June--with a revenue slightly exceeding 1 millions, they had a further deficit of 51,663. The same party continued in power for a further two years under the leaders.h.i.+p successively of Mr.

George Thorn and Mr. John Douglas. Revenue continued fairly elastic, and the deficit period was followed by two years showing small surpluses.

[Ill.u.s.tration: HINCHINBROOK CHANNEL, NORTH QUEENSLAND]

[Ill.u.s.tration: THE NARROWS AND MOUNT LARCOMBE, NEAR GLADSTONE]

Early in 1879 the McIlwraith Ministry a.s.sumed office, at a time when, as the Premier himself admitted in his Budget speech of 1880, the colony was "emerging from a state of depression induced by three bad seasons of an extraordinary character," so that the year 1878-9 closed with the considerable deficit of 216,808. This was partly due, however, to the operation of the Western Railway Act and the Railway Reserves Act, by which the most saleable land in the colony had been included in railway reserves, and the proceeds of sales, instead of as previously going into consolidated revenue, were placed to the credit of a special fund. Mr. (afterwards Sir Thomas) McIlwraith while in opposition had predicted that this course would produce a revenue deficit; consequently on attaining office he induced Parliament to sanction the transfer of all these sums, totalling 382,346, to consolidated revenue. Mr. McIlwraith argued that it would be impossible to construct a t.i.the of the railways needed in different parts of the colony out of the proceeds of land sales, and that it would be sufficient if the interest on railways, until they became fully reproductive, were defrayed from that source. Parliament accepted that view, and forthwith authorised a loan of 3 millions for a comprehensive schedule of railways proposed by the Government in 1879-80. Between August, 1879, and May, 1883, loans amounting to 5,553,000 were floated and a further sum of 1,233,000 was authorised, but not placed on the market. During the McIlwraith Administration of 1879-83 the revenue increased from rather less than 1 millions to 2 millions. The period was characterised by two deficits and three surpluses, showing acc.u.mulated surpluses of 272,412, without taking into account the sum of 382,346 transferred to revenue. During these years the colony was prosperous, the fair seasons, large loan expenditure, the establishment of the British-India service _via_ Torres Strait, and the free introduction of immigrants, all combining to push the country along the path of progress; but prosperity had compelled a _pro rata_ increase of expenditure.

At the end of the quarter-century in 1884 the public debt was 16,570,850, on which the interest charge was 701,565. Of this amount 9,417,318 expended on railways was earning 2 18s. per cent. The length of lines open for traffic totalled 1,207 miles. The population was 309,913. About 2,350,000 had been spent on immigration, of which nearly a third of a million had come from revenue, 1,778,000 from loan, and the rest from "special receipts"--partly contributions from immigrants. The year's imports were of the declared value of 6,381,976, and the exports 4,673,864. Joint stock bank a.s.sets exceeded 11 millions, liabilities were nearly 7 millions, deposits exceeded 6 millions, and savings bank deposits were over 1 million. Of cattle there were 4 millions, of sheep less than 9 millions, while horses numbered 253,116. There were 6,979 miles of telegraph line constructed. There were over 7 million acres of land alienated, which had produced over 4 millions sterling of revenue. The value of minerals won for the year was 1,325,624. There were 528 schools with 60,701 scholars, 5,185 subscribers to public libraries, and 60,257 volumes. Comparing these figures with those of 1860 it will be seen that, despite droughts, floods, and financial crises, the progress attained had been phenomenal.

Thus in a financial aspect the first quarter-century closed glowingly, despite a severe Western drought in 1883. There had been rapid and apparently solid progression, and the disasters of 1866, which seemed at the time to threaten the solvency of Government and people alike, had become an unpleasant memory--a catastrophe very unlikely to recur for various reasons, among them being that the railways were beginning greatly to facilitate transport, as well as to show considerable net earnings; while instead of the Government borrowing at 6 per cent., as formerly, money in abundance could be got at 3 per cent. Moreover, mortgage loans and bank overdrafts bore a greatly reduced rate of interest.

CHAPTER III.

PUBLIC FINANCE (1884-1893).

The Ten-million Loan.--Ministers Practically Granted Control of Five Years' Loan Money.--Vigorous Railway Policy.--Effect of Over-spending.--Inflation of Values.--Increased Taxation.

--Succession of Deficits.--Second McIlwraith Ministry.

--A Protectionist Tariff.--Temporary Increase of Revenue.

--Heavy Contraction in 1890.--Another Big Loan; Failure of Flotation.--The First Underwritten Australian Loan.

--Amended Audit Act Limiting Spending Power of Government.

At the end of 1883 the Griffith Ministry succeeded to office with a strong following. It was early in March, 1884, that the Appropriation and Loan Acts for 1883-4 became law, but the regular session of the year did not begin until 7th July. It was in this session that the Government introduced their colossal railway extension scheme, and their famous "Ten-million Loan Act"--actually, however, the amount was 9,980,000. This sum was to be spent during the following five years, which meant that the members of the a.s.sembly voted in a lump sum, and on an unprecedented scale, the loan expenditure for the maximum term of the Parliament. The effect was also to ensure the life of the Ministry for the same term, as it was intended to expend about 2 millions sterling a year, or about 6 10s. per annum per head of the population. This was equal to about three-fourths of the total consolidated revenue for 1884.

The Ministry no doubt meant well, and their preparation of a schedule of works to extend over five years was in the abstract commendable.

But the expenditure of so much loan money provoked inflation in values, and led to unhealthy speculation in land. Although Ministers did not in any one year quite reach their 2-million conventional limit of loan outlay, the 10 millions were exhausted soon after their retirement from office, and a further loan had to be authorised to finish their uncompleted works. While such railways as the "Via Recta"

(Ipswich to Warwick) and the Cloncurry to the Gulf lines were both on the 1884 loan schedule--the amount set down for each being 500,000--they have never been even commenced to this day, a quarter of a century since they were pa.s.sed by the a.s.sembly. Other lines then authorised absorbed more than the amount voted, and necessarily had afterwards to be completed to make them reproductive.

The revenue not proving as expansive as the necessities of the Treasury required, an Act pa.s.sed in 1885 imposed 5 per cent. ad valorem duties upon most kinds of industrial machinery, increased the spirit duties to 12s. per gallon, and levied upon log and undressed timber a duty of 1s. per 100 feet superficial and upon dressed timber of 1s. 6d. per 100 feet. In the following year the ad valorem duties were increased to 7 per cent., except as to machinery, which remained at 5 per cent.; but small levies like these were as drops in the bucket by comparison with the constantly expanding needs of the Treasurer.

The 10-million loan schedule did not exhaust the list of what were deemed necessary works. In 1886 a special Act was pa.s.sed appropriating 123,000, to be raised by Treasury bills having a term of five years, for the duplication of the Brisbane-Ipswich railway, and the completion of the lines from Mackay to Eton and Hamilton, and from Ravenswood Junction to Ravenswood, respectively. In the year following an Act was pa.s.sed authorising the issue of further Treasury bills amounting to 349,834 for the construction of eight small lines, and the extension of the Brisbane and Southport line, with a branch to Beaudesert, thus bringing the railways and works loan schedule of the Griffith Ministry up to 10,452,834.

By the advent of the financial year 1888-9, most intelligent public men felt gravely disturbed. The bank deposits, which had been trebled in a decade, had to earn interest on the additional 7 millions of money held and advanced. When the Griffith Ministry retired from office in June, 1888, they had recorded four successive annual deficits aggregating 968,313, although between 1884-5 and 1887-8 the revenue had increased by 456,861, and there had been spent over 1 millions of loan money per annum in addition. During the year 1888-9, after Sir Thomas McIlwraith a.s.sumed office, the expenditure increased by 128,922, but he obtained a revenue increase of about 437,000.