Committee recognized the difficulties that attended an attempt to deal with the subject, but shrewdly observed that those difficulties were likely to increase rather than diminish. In 1858 the four colonies had agreed to a conference, and in 1860 the new colony of Queensland gave in her adhesion. All this, however, was not without reservation. South Australia was of opinion that the project of a Federal Legistature was premature, but believed that there were many topics on which uniform legislation would be desirable. Queensland, as was to be expected from her newly won independence, foresaw obstacles to the creation of a "central authority tending to limit the complete independence of the scattered communities peopling this continent." A change of Ministry in New South Wales led to a change of policy there, and despite urgent representations from Victoria and Tasmania, the proposed conference never took place. The fiscal conference held in 1863 for. the purpose of attempting an agreement on the tariff declined without instructions to consider federation.

The six colonies of Australia were now well started on their career as separate countries; and as they developed separate interests and separate policies, the prospects of union became more and more remote. The tariff had been a source of trouble from the beginning. The difficulties were of more than one kind. The geographical situation of the colonies was such that goods imported into the colony with the lowest duties could readily find their way into other colonies, and in this way evasion of the revenue laws was systematized, for it was impossible for the colonies to bear the expense of a service capable of guarding their frontiers. It was for this reason that the need for a uniform tariff was insisted upon in the early years. Even when there was no desire to evade the higher revenue duties, it was often the case that the port of a particular territory was either by natural situation or the course of trade in another colony. Agreements were made which in a rough and ready way provided a remedy. New South Wales and Van Diemen's Land for some years mutually

gave free admission to goods. In 1855 an arrangement was come to by New South Wales, Victoria, and South Australia whereby, first, no import duties were to be taken on goods crossing the Murray, the frontier of New South Wales and Victoria; and, secondly, goods coming by water carriage up the Murray for New South Wales or Victoria paid duty at Adelaide, New South Wales and Victoria dividing equally the proceeds of collection. This arrangement subsisted until 1864, when negotiations for a revision of the system of distribution broke down. The agreement with some modifications was renewed, and was finally terminated in 1873. A modified system of intercolonial free trade, by which each colony admitted free goods bona fide the produce of any other colony, was suggested by South Australia in 1862, but received little encouragement. There was in fact another obstacle than the inability to agree. All the colonies were restrained by Imperial Acts from establishing preferential or differential duties; and this applied equally to their relations with each other as with the outside world. The colonies set themselves therefore in the first instance to secure the removal of these obstacles, and intercolonial conferences asked the Home Government to permit reciprocal arrangements among the colonies. At first these proposals met with little encouragement. Successive Secretaries of State-the Duke of Buckingham in 1868, Earl Granville in 1869, and Lord Kimberley in 1870-felt that they could not with propriety ask Parliament to assent to a measure whereby one part of the British Dominions might differentiate against another; and the Home Government was affected by the fear of complicating foreign relations. The Colonial Office, however, pointed out that the objections and the difficulties of the Home Government would be removed by a "complete customs union," or by any arrangement which made the Australian Colonies one country instead of several countries. In 1873 the resistance of the Imperial Government gave way before the insistence of the colonies; and the Australian Colonies Duties Act, 1873, removed all obstacles to

tariff arrangements amongst the members of the Australian group. The removal of legal restraints had, however, no other result than to mark the width of the gap between the colonies. The question between them was no longer the mere adjustment of tariff regulations so as to meet the financial necessities of all and to secure to each its fair share of revenue collected. Protection had taken firm root in Victoria; and it was not long before that colony was as much concerned to protect her agricultural products and her pastoral industry against her neighbours as to protect her manufactures against the "pauper" labour of Europe. The way was thus barred to the free exchange even of Australian products, for Victoria would hear of it on no other terms than that her manufactures should find a free market in the other colonies. Protection begot retaliation; and after an unsuccessful attempt to effect a fiscal union in 1881, it became evident that in the interests of peace the tariff must be laid aside for a time.

The impossibility of establishing a customs union, and the bitterness of feeling which attended the tariff differences, gave little hope for the cause of federation. Still there were other matters in which disunion meant inconvenience and even danger; and in 1870 Mr. Charles Gavan Duffy obtained a Royal Commission in Victoria on the best means of accomplishing a federal union of the Australian Colonies. The time was one in which the foreign relations of the Empire, both with Europe and America, wore an unusually threatening aspect; and there were not wanting responsible statesmen both in England and the colonies who believed on the one hand that the colonies were a source of entanglement and weakness to England, and on the other that the connection with England was the one thing which threatened the peace of the colonies. There were also plentiful elements of discord within the Empire, and the recent confederation of the Canadian Provinces was generally regarded as a step towards independence. In the not unlikely event of war, the colonies were in a peculiarly exposed condition, for the Home Government

had just carried through the withdrawal of Imperial troops from the colonies in pursuance of the policy approved by the House of Commons. The report of Mr. Charles Gavan Duffy's Commission bears the impress of the times. Urging as before the importance on sentimental grounds of creating a united nation, the report declared that the colonies presented the unprecedented phenomenon of responsibility without either corresponding authority or adequate protection. They were as liable to all the hazards. of war as the United Kingdom, but they were as powerless to influence the commencement of war as to control the solar system; and they had no certain assurance of that aid against an enemy upon which the integral portions of the United Kingdom could reckon. This was a relation so wanting lin mutuality that it could not be safely regarded as a lasting one, and it became necessary to consider how far it might be so modified as to afford greater security for permanence. Reference was made to the former relation between England and Hanover, and between England and the Ionian Isles, which showed that two sovereign states might be subject to the same Prince without any dependence on each other, and that each might retain its own rights as a free and sovereign state. The only function which the Australian Colonies required to entitle them to this recognition was the power of contracting obligations with foreign states; the want of this power alone distinguishes their position from that of states undoubtedly sovereign." "If the Queen were authorized by the Imperial Parliament to concede to the greater colonies the right to make treaties, it is contended that they would fulfil the conditions constituting a sovereign state in as full and perfect a manner as any of the smaller states cited by jurists to illustrate this rule of limited responsibility; and the notable concession to the interests and duties of humanity made in our own day by the great powers with respect to privateers and to merchant shipping, renders it probable that they would not on any adequate grounds refuse to recognize such states as falling under the rule." "It must not be forgotten that this is a

DIFFICULTIES IN SPHERE OF FOREIGN AFFAIRS. 29

subject in which the interests of the mother-country and the colonies are identical. British statesmen have long aimed not only to limit more and more the expenditure incurred for the defence of distant colonies, but to withdraw more and more from all ostensible responsibility for their defence, and they would probably see any honourable mode of adjusting the present anomalous relations with no less satisfaction than we should." The Imperial Government might ascertain the views of the African and American colonies and take the necessary steps to obtain its recognition as part of the public law of the civilized world.1 The circulation of the report elicited expressions of opinion from a number of public men in the colonies (amongst them Mr., afterwards Sir Henry Parkes) as to which Sir C. G. Duffy has since remarked that "a dozen years had not apparently ripened the question for action, but apparently had raised a plentiful crop of new objections." The truth was, however, that to men unaccustomed to the refinements of public law, Sir Charles Duffy's neutrality scheme suggested separation. There was small faith in the sanctity of neutrality, and the general opinion was probably expressed by the gentleman who observed that "no enemy who had the means or power to attack us would respect our neutrality."

Australia was in fact beginning to have foreign affairs very near her door, and the policy of more than one great Power began to develop in the Pacific in a manner which would compel Australia to adopt a counter policy, to maintain which she would require at her back the whole strength of the Empire. It was in 1870 that an intercolonial conference first discussed the subject of defence and the Pacific question. Present interest centred upon Fiji, where the lawlessness of the relations between natives and European traders had long been a grave scandal; and after many negotiations and inquiries, the islands were ceded to Great Britain in 1874.. In 1864 France sent her firstconsignment of criminals to New Caledonia; and Australia,

› Parliamentary Papers, Victoria, 2nd Session, vol. ii., P. 247.