Our First Half-Century Part 9

Speaking generally, Queensland stands well on the London money market at present, as, according to the "Commonwealth Year Book" quotations from the "Economist" newspaper, the "middle price" of her 3 per cents. quoted on 'Change on the 25th September of last year was 100, a figure only equalled at the time by Victoria among the Australian States; and in December following 99, which was on a par with New South Wales stock on the same date, and only 10s. per cent. below the quotation for Victorian stock. These prices, however, for comparative purposes seem to need slight adjustment on account of the interest respectively due at date of quotation.

Having regard to the fact that the public debt of Queensland is higher than that of any other Australian State per head of the population, the policy of abstention from further borrowing from 1903 until 1909 has been vindicated in a most gratifying manner. A pregnant fact is that more than one-half the entire public debt has been invested in railways which in 1908-9 returned 883,610[b] in net earnings, all available for the payment of interest on capital, or equal to about 3 7s. 6d. per cent. per annum, which meant that our railway system was almost self-supporting, besides being the source of a large indirect gain to the Treasury by providing facilities for transport over 3,498 miles of line. It is no exaggeration to a.s.sert that directly and indirectly the railways a.s.sist the Treasury to the amount of the annual interest charge on the entire public debt of the State. Instead of the railways being a burden upon the taxpayer, as in former years, they have undoubtedly now become the backbone of the public credit.

Seven years ago the interest charge on railway capital falling on the taxpayer amounted to 513,128. To-day, as shown by official figures, there is practically no such burden, and the existing state of the investment not only forms a complete justification for the railway policy of the past, but also for the vigorous way in which the construction of new lines is being pushed forward. With a continuance of good management it is apparent that the time is within measurable distance when the Railway Commissioner will, unless rates be reduced, hand to the State Treasurer a large annual surplus which will be available for lightening the public burdens.

Among other minor financial reforms for which the Morgan and Kidston Governments have earned credit is the creation of the Public Estate Improvement Trust Account, to which is charged the cost of roads, water supply, and other improvements made to Crown lands about to be thrown open for settlement, such cost being afterwards added to the selling price of those lands. Up to 30th June, 1908, 1 million acres of Crown land had thus been made available for selection by a total expenditure of 85,784, the value of which has thus been enhanced, it is estimated, by more than half a million sterling. This amount will ultimately find its way into consolidated revenue. And all this with a debtor balance of the account on 30th June, 1908, of only 58,287. Allowing that the profit is shown in figures yet to be realised, the estimated margin is so large that the result cannot be doubtful.

[Ill.u.s.tration: SCENE ON BARCALDINE DOWNS, CENTRAL QUEENSLAND]

[Ill.u.s.tration: BARCALDINE DOWNS HOMESTEAD, CENTRAL QUEENSLAND]

Loan expenditure on public works, though greatly reduced, was never entirely stopped by the Morgan and Kidston Governments. In 1903 they inherited from their predecessors a loan cash balance of 1 millions. By compelling the local bodies to pay up arrears of redemption on local loans, by investing about 603,000 of revenue surpluses in unissued stock, with the help of interest accruing on public loan cash balances, and the annual instalments paid by the Queensland National Bank in liquidation of its extended deposit debt, nearly 3 millions sterling was spent on loan account during the five years ended 30th June, 1909, without placing on the money market any part of the then unissued balance of the 1902 loan.

[Footnote a: The so-called surplus of 487,333 in 1872 was obtained by the transfer of 350,000 from loan fund to revenue.]

[Footnote b: These net earnings are Treasury cash figures.

They differ somewhat from the departmental figures, which do not deal with cash, but with book receipts and expenditure.]

CHAPTER VII.

THE BOOM DECADE (1880-1890).

A Great Boom Decade.--Causes of Inflation of Values.

--Excessive Rating Valuations.--False Basis of a.s.sessing Capital Value.--Prodigality Succeeded by Financial Stringency and Collapse of Boom.--Difficulty in Determining Real Values.--Sir Hugh Nelson's Legislation.

--Sound Finance.--Stability of State.--Prospects Good To-day.

The prospects of Queensland had seldom been brighter than they were at the opening of the 1880-90 decade. The seasons were good, the outlook was regarded as brilliant, and a general air of confidence reigned.

The Government were spending loan money lavishly, and large amounts were being spent in introducing a stream of immigrants from Europe.

These and other causes contributed to the prevailing over-confidence and the consequent excessive values put upon fixed property. One was the influx of capital for investment on private account, for the confidence felt in Queensland mortgage securities not only extended to the other colonies of Australia, but also to the mother country.

Another was the discovery of subterranean water in Western Queensland, and the opinion expressed by geologists that more than one-half the total area of the colony, and that in the driest parts of the far West, was artesian water-bearing country. The discovery, it was argued, had added a new province to Queensland, and one whose fertility, water once provided, would not be excelled, despite a normally light rainfall, by any other part of the continent. One consequence was the sale of Western stations at high prices, and the investment by their late owners of the proceeds in city and town properties. They had experienced the risks of the far inland climate, and they wanted to invest in land in the seaport towns, which must quickly become centres of extensive trade.

Another cause was the raising of rating values by the local authorities, of whom those having jurisdiction in suburban or country areas were endowed with 2 from the Treasury for every 1 raised by rates. To augment the claims for endowment, although the rate levies were in a few cases raised to the maximum legal limit, in most the valuations alone were raised, and the rate levy left untouched. It was held that it paid the property owner to contribute a high rate when with the endowment it meant three times that sum, most of which would be spent in improving his land by making roads and carrying on other local works calculated to enhance property values. A further cause of inflation was the cutting up of suburban land into 16-perch allotments, and selling them on long terms to working men and to speculators. A still further cause was, as already mentioned, the influx of external money at reduced rates of interest through the financial inst.i.tutions. At first rents were so high as apparently to justify an advance on true values; but as the expanding process went on vendors ridiculed a capital value based on income-earning capacity.

"What is the use of talking nonsense!" the agent would exclaim; "it is not what this property will bring in annually now, but what it will be worth in twenty years' time."

Even conservative loan inst.i.tutions accepted valuations based on actual sales. Prices in many cases doubled and quadrupled in a few months without much regard to the income-earning power. Then people were told that Brisbane would by and by, with an immense railway mileage finding its terminus at the wharves, be as big as Sydney or Melbourne; that land in George-street and Collins-street was realising 2,000 per foot frontage, bare; and that therefore choice sites in Queen-street could not be worth less than 1,000 per foot frontage.

Thus prices advanced until the second half of 1888, when the demand for real property almost ceased. From that time until 1893 values were as far as possible upheld by the mortgagees, for they believed that the stagnation must be but temporary. Then came the crisis in the world's money markets, and it smote Queensland with prostrating force.

The gradual reduction of local authority endowments, followed by their abolition in the year 1902-3, and the consequent increase of rate burdens, had a depressing effect upon property values, so that even to-day, more than sixteen years after the collapse of the boom, city lands do not realise more than one-half the prices demanded and often obtained in 1888.

It is easy to blame the leading parliamentarians of the time for their prodigality in expenditure; but, when the most experienced bankers of the time threw prudence to the winds under pressure of a flooded money market, we may at this distance of time judge public men less harshly than they were judged in 1893. Confidence was universal, and the man who raised a warning voice found himself figuratively "sent to coventry." An epidemic of swollen values pervaded the entire continent. Even so late as 1893, two skilled and disinterested Ministers of the Crown, and both possessed of banking experience, who were commissioned by the Government to report confidentially on the securities of the Queensland National Bank soon after its suspension, failed to realise the full extent of the inflation of past years, or the depreciation in land values that had taken place despite the efforts made to maintain them. For they gave such a report of the values of the bank's securities as induced the Legislature to sanction an abortive scheme of reconstruction and the retention of Government moneys. It is, however, to Sir Hugh Nelson's credit that, three years later, he pa.s.sed through Parliament an amending Act, embodying the scheme which has since restored the bank to the status of a "national"

inst.i.tution.

Nineteen years have elapsed since the close of this period of extravagant borrowing and reckless expenditure, both public and private. For some years past Queensland has been enjoying almost unexampled prosperity, and the question naturally arises whether that prosperity may not be followed by another crisis. On this point examination of fixed property values, which are a good index, leads to a favourable conclusion. Of city or town lands there has of late years certainly been no inflation. Farming and dairying land values have no doubt risen rapidly, but not more, perhaps, than in proportion to the enhanced stable income-earning value arising from the success of the sugar and dairying industries and the enlarged markets available since federation to farmers all over Australia. In pastoral country there has certainly been no such inflation as occurred in the 1880-90 decade. Buyers discounted the future when, to justify their antic.i.p.ations, the 372,105 square miles of artesian water-bearing country should have been already opened up and the country made increasingly productive by the streams from thousands of bores.

To-day, as shown elsewhere in this book, artesian water is flowing to such an extent in Queensland that it would, with complete reticulation, supply 12,000,000 people with 40 gallons a day each.

This in a country, too, which formerly was almost dest.i.tute of surface water. More bores are every year being put down, while geological research has lately added considerably to the area of artesian water-bearing country in Queensland. Generally trade is sound to-day, while banking deposits have made but gradual progression in volume during the last twenty years. Close settlement is rapidly going on, and the pastoral industry, which furnishes about 50 per cent. of our exports, is in a most prosperous condition after several good seasons capped by recently advancing prices. Wool alone, whose producers are realising highly satisfactory profits, formed 2855 per cent. of our exports in 1907. Over gold mining there may be a fleeting cloud, but every year's laboratory research extends the area of remunerative ore deposits by reducing the cost of treatment. The cost of production and transport in all the primary industries is being gradually lessened.

Happily there is no boom, present or prospective, to disturb the steady progress of the country; and it is rea.s.suring to learn from recent public speeches by eminent Australian bankers that they are refusing to make advances for other than legitimate development.

[Ill.u.s.tration: SWAN CREEK VALLEY, NEAR YANGAN, WARWICK DISTRICT]

CHAPTER VIII.

CROWN LANDS LEGISLATION.

The Code of 1860.--Crown Lands Alienation Act of 1868.

--Pastoral Leases Act of 1869.--Homestead Areas Act of 1872.

--Crown Lands Alienation Act and Settled Districts Pastoral Leases Act of 1876.--The Griffith-Dutton Land Act of 1884.

--Co-operative Communities Land Settlement Act.--Land Act of 1897.--Forms of Selection.--Act to a.s.sist Persons to Settle on Land by Advances from the Treasury.--Extension of Pastoral Leases.--Closer Settlement Act.--Land Orders.

The land code of the session of 1860, so enthusiastically eulogised by Sir George Bowen in his despatch to the Secretary of State, unfortunately by no means settled the complex questions involved in the management of public lands extending over 15 degrees of longitude and 18 degrees of lat.i.tude. Indeed, to-day the land laws are probably as complicated as ever they were in the history of Queensland, notwithstanding the desire of the Legislature to make them as simple as possible, and to meet the wants of every description of settler, whether he be a homestead selector with his 320 acres, a grazing farmer with his 20,000 acres, or a pastoral lessee with his 1,000 square miles.

During the first decade several Land Acts, amending the Acts of 1860, were pa.s.sed; but by the advent of the year 1867 it was found that the facilities offered for settlement were inadequate, and that new methods, especially in the direction of mixed farming adapted to the country and climate, and demanding holdings of increased area, were indispensable if there was to be close settlement on a more extensive scale than that contemplated by the pastoralist. Among the members of the a.s.sembly in 1867-8 was Mr. Archibald Archer, of Gracemere, then member for Rockhampton, who earnestly voiced the popular contention that the upset price of 1 per acre was excessive, and that the holdings permitted to the settler by law were too restricted in area. In October, 1867, the Minister for Lands was Mr. E. W. Lamb, an old-time New South Wales land office official, and then a Peak Downs squatter. He introduced a Crown Lands Alienation Bill, which, after discussions showing its futility, was, on the motion of Mr.

Macalister, then in opposition, referred to a Select Committee comprising the Minister and Messrs. Archer and Fitzgerald, the latter member for Kennedy. In the next session a new bill was introduced, giving effect to the recommendations of the Select Committee, which provided for the resumption of the halves of all runs within the Settled Districts, and for making available such resumed areas wherever required for settlement. The bill also provided for the opening of these areas to free selection before other than a feature survey had been made. This land was to be cla.s.sified as (1) agricultural, in areas not exceeding 640 acres and at 15s. per acre; (2) first-cla.s.s pastoral, in areas not exceeding 2,560 acres, at 10s.

per acre; and (3) second-cla.s.s pastoral, in areas not exceeding 7,680 acres, at 5s. per acre. The purchase was to be conditional upon actual occupation and improvement, the payment being spread over ten annual instalments, called rents, of 1s. 6d., 1s., and 6d. per acre respectively. Provision was also made for homestead selections not to exceed 80 acres of agricultural land or 160 acres of pastoral land, at a yearly rental for five years of 9d. an acre in the case of agricultural land and 6d. an acre for pastoral country. This measure, having become law, caused a tremendous rush for land, and in some cases, no doubt, too large areas were taken up, regarded from the standpoint of the public interest, the abuse partly arising from faulty cla.s.sification by the Government Commissioners. By at least one of these officers it was held, for example, that land, no matter how accessible or good its quality, was only second-cla.s.s pastoral if dest.i.tute of surface water. But, whatever abuses crept in, there can be no doubt that the Act of 1868 was the first legislation to place the people on the land in areas of such extent, of such quality, and at such prices as were then deemed requisite for successful occupation. Many of the most prosperous farmers of to-day, or their parents, settled under the 1868 Act, and now form most valuable members of the community.

In 1869 the Pastoral Leases Act was pa.s.sed by the Lilley Government, and gave the lessees in the unsettled districts a better tenure than they had before enjoyed--21 years in respect of new country and renewed leases, and 14 years in the case of existing leases, with septennial automatic reapprais.e.m.e.nts of rent in all instances. The Liberal members of the a.s.sembly a.s.sented to a pre-emptive purchase clause in this Act by which a lessee was empowered to purchase on his run without compet.i.tion an area of 2,560 acres, containing permanent improvements made by him, at the price of 10s. per acre. But it was only discovered by many members after the Act had become law that a run might mean a block of 25 square miles, and that a lessee with a dozen blocks could secure strategic freeholds in as many different parts of his holding. However, the provision remained unaltered until in 1884 the Minister for Lands in the Griffith Ministry (Mr. Charles Boydell Dutton) refused to sanction further purchases of the kind, and during the same year endeavoured to sweep away the privilege by new legislation. Parliament, however, refused to repeal the provision, and would only consent to withhold the privilege of pre-emption in respect of leases acquired after the pa.s.sage of the Land Act of 1884.

Altogether 363 pre-emptive selections in respect of as many runs were made. By the Act of 1868 the pastoral lessees in the settled districts had also been granted ten years' leases for the unresumed halves of their runs; but in both cases the Minister was empowered to resume part of any run on giving six months' notice.

The Homestead Areas Act of 1872 provided for the setting apart of special areas as "homestead areas," to be exclusively settled as homestead selections, or selections taken up by virtue of land orders issued under the Immigration Act of 1869. A departure from the generally accepted principle of "homestead" settlement--that the land is granted at a nominal price in consideration of the selector personally residing on it--was made in providing for increased areas up to 320 acres at conditional purchase prices. This anomaly was corrected by the Act of 1876, which styled such larger homesteads "Conditional purchases in homestead areas."

In 1876 Mr. Douglas, as Mr. Thorn's Minister for Lands, introduced an amending and consolidating Land Bill, repealing all existing alienation Acts. Extended powers were given to Land Commissioners to expedite settlement. Monthly Commissioners' Courts were provided for, but no decision of a Commissioner's Court, except in case of certificates of performance of conditions, was to be final until confirmed by the Minister. The most noteworthy provision reduced the maximum area that one person might select. The area conditionally selectable by one person was made not less than 40 acres nor more than 5,120 acres. The Act declared all leased land reverting to the Crown on the Darling Downs to be homestead areas, and empowered the Government to establish such areas elsewhere. Within these areas conditional purchase selections were restricted to 1,280 acres and homesteads to 80 acres. Personal and continuous residence by the selector was made compulsory, and, before the fee-simple could be acquired, permanent improvements to the value of 10s. per acre were required to be made. A homestead was protected against claims for debt. A Settled Districts Pastoral Leases Bill also became law this year, providing that on the expiration of the ten years' leases then held runs should be offered at auction on a five years' lease at a rental of not less than 2 per square mile, an outgoing lessee being allowed six months' grace in which to remove his stock. In 1882 the Act of 1876 was amended so as to abolish the sale of runs by auction unless when there was no application for re-lease by the existing lessee, and lessees under the Act of 1876 were given the right to an extension of their leases for a period of ten years instead of five years. The rent, however, was to be subject to apprais.e.m.e.nt.

The next great land measure was the Griffith-Dutton Act of 1884. Its main features were the abolition of the pre-emptive rights of pastoral lessees; the creation of a Land Board consisting of two members--an independent tribunal acting like Judges of the Supreme Court, and, like the Judges, holding office during good behaviour; and the introduction of the leasehold tenure in connection with grazing and agricultural farms. The object of the Government was to bring about close settlement. As it was recognised that it was not feasible at that time to devote the lands of Western Queensland to agriculture, provision was made for the gradual subst.i.tution of a smaller cla.s.s of graziers for the pastoral lessees with their many hundreds of square miles of territory. Accordingly inducements, by way of fixity of tenure and compensation for improvements, were offered to pastoral tenants to surrender their existing leases and bring their holdings under the Act. The Crown was thereupon ent.i.tled to resume one-half, one-third, or one-fourth of such holdings, the proportion varying inversely with the length of time the leases had to run. These resumed areas were then divided into smaller holdings called "grazing farms,"

the maximum area being 20,000 acres, which were to be opened to selection on a thirty years' lease, with periodical reapprais.e.m.e.nts of rent by the Land Board. It was believed that the lessees of these smaller holdings would so improve the country that its carrying capacity would be greatly increased, and the Crown would derive a larger revenue from its pastoral lands, whilst at the expiration of the leases agricultural settlement might be possible. The success of the grazing farm system has amply justified the expectations of the framers of the Act. The leasehold principle was also applied to agricultural farms, the maximum area of which was fixed at 1,280 acres, with a fifty years' tenure, but the selector was given the right to acquire a freehold after ten years' (later reduced to five years) personal occupation. Although dropping the name of "homestead,"

the Act maintained the homestead principle by providing for the freeholding of agricultural farms not exceeding 160 acres in area at 2s. 6d. per acre after five years' personal residence by the selector.

The Act, which practically superseded the Pastoral Leases Act of 1869, continued the right of pastoral lessees to depasture their stock on the resumed areas until they were required for closer settlement.

It also repealed existing alienation Acts, and provided for all the contingencies which might be expected to arise. Among the repealed Acts were two which had given rise to much party contention in previous Parliaments--the Western Railway Act and the Railway Reserves Act, to which allusion is made in the parts of this work dealing with "Public Finance" and "Fifty Years of Legislation."

[Ill.u.s.tration: SURPRISE CREEK FALLS, CAIRNS RAILWAY]

Amending Acts were pa.s.sed in 1885, 1886, 1889, 1891, 1892, 1894, and 1895, but these do not call for mention except to say that the Act of 1891 introduced a new mode of selection called "unconditional,"

providing for selections up to 1,280 acres at prices one-third greater than those for agricultural farms, and payable in twenty annual instalments.

In 1890 an Act was pa.s.sed providing for a five years' extension of leases held under the 1869 Act and not affected by the Act of 1884. In 1892 an Act (extended in 1894, 1895, 1897, and 1898) was pa.s.sed giving a seven years' extension of term to pastoral lessees, and an extension of five years (afterwards increased to seven years) to the lessees of grazing farms selected before the introduction of the bill and situated in the southern part of the State, who should enclose their holdings with rabbit-proof fences.

In 1893 the Co-operative Communities Land Settlement Act was pa.s.sed at a time of stress, with a view to enabling men of good character but without capital to settle on the land with the aid of Government advances. In all, twelve "self-governing communities" were formed with a total adult male members.h.i.+p of 485. In no case did the venture prove successful, and by an amending Act pa.s.sed in 1895 the several communities were dissolved, the members thereof were absolved from all liability to the Government for advances made, and the land and a.s.sets were suitably apportioned among the remaining members of the dissolved groups, to the number of 88. They were a.s.signed an area aggregating 13,491 acres to be held on a five years' tenure at a rental of d.

per acre per annum, subject to a condition of personal residence and to the purchase of the land during the fifth year at 2s. 6d. an acre.

Only three-fourths of these 88 settlers brought their selections to freehold, and the last transaction was not closed till ten years had elapsed, instead of five, from the dissolution of the groups.

Consequent on another period of depression, Parliament in 1905 authorised another experiment by way of Government a.s.sistance to would-be settlers without means, but the communal element is not so prominent in the new measure, and the "self-government" principle is excluded. Only one settlement has been formed under the Act of 1905, and it is under Government control. While holding out some promises of success, these are not so tangible as to lead to further ventures of the sort. Indeed, the need for them has disappeared with the return of prosperity.

The last comprehensive Act, extending over 101 pages of the Statute-book, was pa.s.sed in 1897, and it still remains the princ.i.p.al Land Act, upon which all subsequent amending measures have been grafted.

It is fitting to set out briefly what are the modes by which it is sought to secure settlement on the public lands of the State after half a century of legislation.[a] There is, first, the agricultural farm, in areas up to 1,280 acres on a tenure of twenty years and paying an annual rental of one-fortieth part of the purchasing price, such rentals being actually instalments of the price, and leaving only one-half of the price to be paid at the end of the term. The price cannot be lower than 10s. per acre, and there are conditions of occupation and improvement to be performed. There is the agricultural homestead in areas ranging up to 640 acres, the area varying inversely with the quality of the land. This form of settlement is subject to conditions of personal residence and improvement. The homesteads are capable of being converted into freeholds after five years and up to ten years for a total price of 2s. 6d. per acre, payable at the rate of 3d. per acre per annum. There is the unconditional selection in areas up to 1,280 acres, with no conditions to perform but the payment of rent during twenty years at the rate of 5 per cent. of the purchasing price each year, the purchasing price being one-third higher than that at which the land was available for agricultural farm selection. There are the grazing selections in the remoter districts in areas up to 60,000 acres. These selections are not capable of being made freehold, but are held on leasehold tenures of 14, 21, or 28 years, at rentals ranging from d. to 6d. per acre per annum, and subject to conditions of occupation and fencing. There are the scrub selections not exceeding 10,000 acres each, intended to secure the destruction of useless scrub in the remoter districts and the conversion of the land into good pasture. The tenure is purely leasehold, with a term of thirty years and at a peppercorn rental for a period having relation to the extent of scrub to be destroyed.