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of Victoria, was Attorney-General and Minister of Justice; Sir George Turner, late chief of the Victorian Ministry, was Treasurer; Mr. Charles Cameron Kingston, of South Australia, was Minister of Trade and Customs; Sir John Forrest, of Western Australia, Postmaster-General; and Sir James R. Dickson, of Queensland, Minister of Defence. Of these seven members of the Cabinet all except the last were natives of Australia. The death of Sir James Dickson within a few days of his nomination to office necessitated some changes in the constitution of the Ministry, his place being supplied by Mr. James G. Drake, of Queensland, who became Postmaster-General, Sir John Forrest being made Minister of Defence.

Five out of the seven Members of the original Federal Cabinet had been Prime Ministers in their respective Colonies. All of them, except Sir James Dickson, were reckoned as Protectionists. But, according to the declarations of Mr. Barton and others of his colleagues at various public meetings, their fiscal policy was to be one primarily aimed at the supply of revenue. A sum of between 8,500,000l. and 9,000,000l. would be required for the purposes of the Federal Government, according to the Constitution, and this could be raised only by Customs and Excise duties. The Commonwealth Act provided that the Federal expenditure for ten years must not be more than one-fourth of the net revenue from Customs and Excise-the balance to be refunded to the States, or devoted to payment of interest on debts taken over. Uniform duties had to be imposed within two years from the establishment of the Commonwealth, all inter-State duties being abolished, with absolute freedom of trade throughout the States. For five years after the imposition of uniform duties the consuming States were to be credited with the import and Excise duties paid on the articles, but, subject to that proviso, the Commonwealth was to credit revenue, debit expenditure, and pay balances to the several States, as prescribed in Section 89 of the Commonwealth Act.

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As some of the States, up to the passing of confederation, had adopted a policy of Free Trade, while others had favoured Protection, the fiscal policy of the new Federal Government had to be based on a compromise between the two systems. a compromise, to be just, would necessarily involve the raising of the Customs duties in the Free Trade States, and the lowering of the duties in the Protective States. Mr. Barton, the Federal Premier, who had been the leader of the Protectionist minority in New South Wales, a Free Trade State, was in a position of some difficulty. The first and most perplexing of the problems before the Federal Government was the adjustment of its financial policy, so that while due regard was had to the individual interests of the several States, a sufficient provision might be made for the national exchequer to meet the new demands of that larger life into which the associated States had entered.

In one of his earliest public pronouncements, Mr. Barton indicated clearly the broad lines of the Ministerial policy. He insisted on the necessity of a wide programme and "the higher politics." The Constitution would have to be carefully regarded. There would be "a moderate Protectionist tariff." A promise was held out of subsequent preferential duties in favour of the mother country, and to comply with Imperial aspirations. The Commonwealth, Mr. Barton contended, "could not afford duties high enough to kill revenue." The prohibition of coloured immigration was also made a part of the new Federal policy.

The elections for the two Houses of the Federal Parliament were held in all the States, according to the new law of the Constitution, on March 30. There having been no time for the formation of parties, the issues set before the electors were somewhat complicated, and the results doubtful and uncertain. The chief question necessarily arising out of the composition of the Ministry was that of the Federal tariff. The parties were broadly divided into those in favour of a high tariff or Protection, and those inclined to a low tariff or Free Trade. The Ministry itself could not be identified, after Mr. Barton's declarations, with either one or the other party. The Labour party, which by its simplicity of programme and careful husbandry of its forces had arrived at a commanding position, out of proportion to its numerical strength in the Commonwealth, was itself almost equally divided on this question-Free Trade being deliberately excluded from the "platform" of the Trades Council in New South Wales and elsewhere. In these circumstances, not much significance could be attached to the results of the polling for the Federal Parliament, it being yet too early in the history of the Commonwealth to predicate the character of the policy preferred by the people of Australia.

Dividing the Members returned into the two categories of high tariffists and low tariffists, the following is a summary of the general result in the six States:

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According to these figures the parties in the two Houses appeared to be very evenly balanced. While the Free Traders had a majority of six in the Upper House or Senate, the Protectionists had a majority of five in the House of Representatives or popular Assembly. As the Senate, though practically based on the same suffrage as the House of Representatives, is elected specially to represent the States, each State, as in America, having the same number of Representatives (six) without regard to size or population, a majority of six in favour of Free Trade may be regarded as indicating broadly the general opinion of the individual States on this dominant question. The result would have been even more favourable to the Free Traders had the Senate elections for Queensland been held on the same system as in the other States. While in all the other States the whole State votes as a single electoral district for the Upper House, in Queensland that law is not yet in force; so that the elections for the Senate are merely an echo of the elections for the Lower House. Though Queensland, as a State, is distinctly in favour of a low tariff, the Labour party in Queensland is more powerful and better organised than elsewhere, and the Labour party preferred to make the employment of Kanakas in the sugar plantations the test question, rather than any other. Its opponents being divided and undisciplined, the result was to give an undue advantage to one section of politicians in the Northern State, and to invest its representatives in the Senate with a disproportionate share of voting power, so that the result in Queensland may turn out to be only a nominal victory for the high tariff party.

The electoral returns, even on the question of the tariff, gave no clear indications of the policy of the Federal Government. On several minor issues the Parliament was divided, and though the Ministry claimed a majority it was not of a kind to promise a long life to Mr. Barton and the Cabinet he had formed to carry on the business of the Commonwealth.

The first session of the Federal Parliament was opened by the Duke of York, representing the Sovereign, on May 7. The Earl of Hopetoun, as Governor-General, delivered an address announcing the policy of the new Administration. The Federal tariff was declared to be the first work of Parliament. In it the revenue was the first consideration. The existing tariffs in several States had created industries so substantial that any policy aimed at their destruction was inadmissible. The Federal tariff "must operate protectively as well as for the production of revenue." Other principal measures announced were the abolition of Kanaka labour, a bill for conciliation and arbitration in trade disputes, a bill for adult suffrage in Federal elections, and a bill for providing old-age pensions.

Sir Richard C. Baker was elected President of the Senate, with Mr. R. W. Best as Chairman of Committees. Mr. R. W. Holder, a former Member of the South Australian Government,

was elected Speaker of the House of Representatives, and Mr. J. M. Chanter, Chairman of Committees.

In the House of Representatives forty-two Members were ranged on the Ministerial side and thirty-two on the Opposition. The leader of the Opposition was Mr. G. H. Reid, a prominent champion of the Free Trade party, lately the head of a New South Wales Ministry, with Sir William Macmillan as his chief associate.

It was some time before the new Parliament proceeded to business. Meanwhile there was much public anxiety as to the fiscal policy to be adopted by Mr. Barton and his Cabinet. The establishment of a central Government necessarily involved a reconstruction of the whole administrative machinery. The abolition of all inter-State duties and the necessity of providing a sufficient revenue for the maintenance of the Commonwealth out of a uniform tariff for all the Australian seaports, some of which had been subject to a low tariff and others to a high, threw much work of a novel kind upon the newly created Federal departments.

Sir George Turner, as Treasurer, made his Financial statement to the House of Representatives on October 8, being immediately followed by Mr. Kingston, the Minister of Commerce, who submitted the new Federal tariff. The establishment of internal Free Trade was estimated to entail upon the Commonwealth the necessity of raising 1,000,000l. by increased import duties on oversea imports-an additional impost which would fall mainly upon New South Wales, the leading Free Trade State in the Union. The total revenue of the Commonwealth in the current year was estimated at 8,009,000l. -of which New South Wales would contribute 2,360,000l.; Victoria, 2,410,000l.; Queensland, 1,404,000l.; South Australia, 665,000l.; Western Australia, 800,000l.; and Tasmania, 370,0001. In a "normal" year these estimates would be exceeded, the excess being calculated at 8,942,000l., the surplus falling almost entirely on New South Wales. The difference between the anticipated current revenue and the normal revenue expected in future was explained as arising from New South Wales, in the current year, yielding less than her proportionate share of revenue from Customs. Victoria and South Australia would also have to provide a somewhat larger revenue in the future, whilst the shares of Queensland, Western Australia and Tasmania would be slightly smaller. With the addition of other sources of revenue the Federal Treasurer estimated that he would have a grand total of 10,339,750l. at his disposal. The estimated total expenditure for Federal purposes was 4,034,106l., leaving a sum of 6,305,6441. to be distributed among the several States, according to the proportions regulated by the Constitution Act.

Establishing a somewhat novel precedent, the Treasurer, after reading his statement, left it to Mr. Kingston, the Minister

of Commerce, to unfold on the same day his scheme of Ways and Means. The tariff, as introduced by Mr. Kingston, was received without enthusiasm by either party in the House, and from the hostile language regarding it used by both sides it may be presumed to be a settlement of the much vexed fiscal question which was intended to be a compromise, not more distinguished by principle than are most compromises. The duties imposed on imports were many and various in character and in degree. The Customs and Excise duties on stimulants and narcotics were generally higher than had ever been known before in any Australasian tariff. Spirits were to be taxed at 14s. a gallon, wines from 8s. to 12s., and beer at 1s. 6d. Manufactured tobacco was to pay 3s. 6d. a pound, and cigars 5s. 6d., besides 15 per cent. ad valorem. The composite duty, partly on weight or bulk and partly on value, was a conspicuous feature of Mr. Kingston's scheme. Tea, on which there was a duty of 3d. a pound in the Victorian tariff, was to be taxed at 2d. a pound, and 20 per cent. ad valorem. On sugar there were imposed various duties, according to its source and circumstances of production. While cane sugar was subject to a duty of 61. per ton, "other" sugar was to pay 107., with a bonus of 31., in the shape of drawback, on the local article. On manufactures, especially on woollens and cottons, the duties. imposed were lighter than the Protectionists had hoped, and considerably less than had been exacted from the same class of goods in Victoria. Besides these imposts the Minister of Commerce announced that bonuses would be given on certain native industries, pleading, as the chief difficulty in the passing of any fiscal scheme, the adjusting of the financial system of the Commonwealth so as not to dislocate the State finances, there being already six State tariffs all unlike.

The new Federal tariff, when first announced, provoked much criticism from both Free Traders and Protectionists. The Melbourne Argus, representing the former, declared that "so unpopular because so unjust, so heartless, and so unstatesmanlike a tariff had never before been submitted in Australia." The organs of the trade societies found fault with Mr. Barton's fiscal policy as not going far enough in the direction of Protection. Most of the duties proposed to be levied on manufactures were lower than had been the rule in the Protective States, to the detriment of the national industries, which had been called into existence by fiscal legislation.

The leader of the Opposition, Mr. G. H. Reid, moved, on October 15, a resolution affirming that the tariff as proposed "would place the finances of the Commonwealth and the States upon an unsound and extravagant basis"; that it was unequal in operation and injurious to the working classes, who, as consumers, would bear the chief portion of the burden. After a heated debate, lasting for nearly a fortnight, Mr. Reid's motion was defeated on November 1 in the House of Represen

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