Commonwealth. When the Constitution Act was under consideration, the problem arose of ensuring a sufficient Customs Revenue to enable each State to receive back from the Federal Treasurer an amount equal to what its own receipts would have been, less the net expenditure of the Commonwealth. This necessity was met by the "Braddon Clause,” as section 87 was called, providing that during a period of ten years after the establishment of the Commonwealth, and thereafter until further legislative action is taken by Parliament, not more than one-fourth of the net revenue of the Commonwealth from Customs and Excise shall be applied annually towards Commonwealth Expenditure. The balance of three-fourths is to be returned to the States, or applied towards the payment of interest on the debts of the several States taken over by the Commonwealth. Under these circumstances it was recognised that it would be necessary to raise a revenue, certainly over £6,000,000 and more probably approximating £8,500,000, so that the States should be recouped in the manner indicated. It was, therefore, apparent that the elections could not be contested on a clear-cut Freetrade-Protection issue, and the parties divided on the question as to whether the tariff should be revenue-producing alone, or of a more or less protective character. The Prime Minister, in his official declaration of ministerial policy, announced himself in favour of a tariff that would vield revenue without destroying industries, or a policy of "moderate protection." The fiscal issue was made most prominent in New South Wales and Victoria, although in the other States more or less powerful organisations ranged themselves on either side. Representatives of labour, for the most part, took up an independent position.

The elections were conducted as provided by the different State laws. Each State voted as one constituency for the Senate, and in Tasmania and South Australia the same procedure was adopted in voting for the House of Representatives. The elections took place on the 29th and 30th March, each of the opposing parties claiming the victory when the final results were published. From the declared policy of the candidates it appeared probable that the protectionists would have a majority in the Lower House, while the "revenue-tariffists" had a stronger hand in the Senate. The attitude of the Labour Party, which had secured 23 seats in the two Houses, was now of prime importance, but a semiofficial statement from one of their number made it clear that the party intended to "retain the balance of power and use their strength only to defeat a government which refused to obey the will of the people." In addition to completing arrangements for the mechanical working of both Houses, preliminary action with regard to the framing of a tariff had to be initiated in the interval between the elections and the meeting of Parliament. The Prime Minister was also called upon to deal with questions affecting the condition of affairs in the New Hebrides, and the ownership of Kerguelen Island, and the policy pursued in these matters showed that the Commonwealth was prepared to take cognisance of subjects that lay outside the dominion of Australia. This

development met with some adverse criticism, but, generally speaking, the introduction into Australian politics of a more-extended range of interests and a broader aspect of national life was hailed with satisfaction.

The ceremony of opening the first session of the first Federal Parliament of the Commonwealth took place on the 9th May, 1901, in the Exhibition Building at Melbourne, which had been specially decorated for the occasion. Under commission from His Majesty King Edward VII., His Royal Highness the Duke of Cornwall and York formally opened the Parliament and in his speech from the throne, reference was made to His Majesty's deep interest in the consummation of Australian union, and eloquent testimony was given to the loyalty and devotion of the Colonies to the Empire. On the same day the Senate elected Sir Richard Chaffey Baker, of South Australia, as its first President, while the House of Representatives elected Mr. Frederick William Holder, also of South Australia, as Speaker. The GovernorGeneral delivered his speech to members of both Houses on the following day, in which an outline was given of the policy of the Cominonwealth. In addition to proposals necessary for adapting the recently transferred Customs and Excise, Posts and Telegraphs, and Defence Departments to the new conditions, measures covering a wide range of subjects were promised. Bills establishing a High Court of Australia, a Commission for the execution and maintenance of the provisions of the Constitution relating to Trade and Commerce, and for regulating the Public Service of the Federation were included in the first part of the Government programme, and the selection of the site for a Federal capital was looked upon as a matter of comparative urgency. regards the fiscal policy, it was stated that "The fiscal proposals of any Government must be largely dependent on the financial exigencies of the States. The adoption of the existing tariff of any one of these States is impracticable, and would be unfair. To secure a reasonably sufficient return of surplus revenue to each State, so as fully to observe the intention of the Constitution, while avoiding unnecessary destruction of sources of employment, is a work which prohibits a rigid adherence to fiscal theories. Revenue must, of course, be the first consideration, but existing tariffs have in all States given rise to industries, many of which are so substantial that my advisers consider that any policy tending to destroy them is inadmissible. A tariff which gives fair consideration to these factors must necessarily operate protectively as well as for production of revenue.”

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Bills were also promised dealing with the restriction of immigration of Asiatics, and the diminution and gradual abolition of the introduction of labour from the South Sea Islands, while measures were stated to be in preparation providing for conciliation and arbitration in cases of industrial disputes extending beyond the limits of any one State, for the uniform administration of the law relating to patents and inventions, and for a uniform franchise in all federal elections. Amongst

other legislation foreshadowed, but not designed for immediate con sideration, were Bills dealing with Old Age Pensions, Banking Laws, Federal Elections, Navigation, Shipping, Quarantine, and the management of State Debts. Reference was also made, and attention promised to the question of the relations of the Commonwealth with the islands of the Pacific, the construction of railways, connecting the eastern states with Western Australia, and also the Northern Territory of South Australia, while with regard to the latter its transference to the Commonwealth was also projected. Mention was also made of such matters as the strengthening of Commonwealth defences, the assimilation of postal and telegraph rates, and the adoption of universal penny postage. After the formal opening of Parliament, both Houses adjourned until the 21st May, when the real work of the session began. Early in the debate on the Address in Reply the Labour Party raised the question of a "White Australia" by moving amendments to the effect that black labour on the sugar plantations of Queensland and northern New South Wales should cease at once, but on the assurance being given that the Ministry had the matter under consideration the amendments were negatived. The address was finally adopted in the Senate on the 31st May, and in the House of Representatives on June 5th, and the way was then clear for practical legislation.

The first measure introduced into the House of Representatives was the Acts of Parliament Interpretation Bill on the 10th May, while in the Senate leave to introduce the Service and Execution of Process Bill was moved for on the opening day. On June 5th notification was given of several bills dealing with such subjects as Pacific Island Labourers, Judiciary, High Court of Procedure, Federal Elections, Federal Franchise, Conciliation and Arbitration, Immigration Restriction, Public Service, Interstate Commission, Acquisition of Property for Public Purposes, Defence, and Customs. On the same date the PostmasterGeneral introduced the Post and Telegraphs Bill in the Senate.

Early in the session the Senate gave token of its intention to maintain strictly the privileges granted to it by the Constitution. Exception was taken to the first Supply Bill sent from the House of Representatives because the accounts of proposed expenditure had not been incorporated in the measure, but submitted in the form of a schedule. The Bill was returned to the Lower House, which consented to amend it in accordance with the wishes of the Senate. In the House of Representatives deliberations were commenced on the Public Service Bill, and although the Lower House had passed the measure on to the Senate by the end of July it was not till near the close of the session that it finally became law. The second reading of the Customs Bill, a purely machinery measure, passed the Lower House early in July, but the Defence Bill, which proposed to introduce compulsory military service, was shelved. Another measure which met with little success was the Property Acquisition Bill, the various schemes devised for payment for property acquired from individuals or States evoking much

opposition from the State Governments, while the Government did not persevere with the bill to institute the Interstate Commission. During July and August, in addition to Supply Bills, the Acts Interpretation Act and an Audit Act received royal assent, while the State Laws and Records Recognition Bill had been practically finally dealt with, and the Postal Bill (assented to on the 20th November) was also in a fair way towards completion, a novel clause being inserted in the latter measure at the instigation of the Labour Party providing for the employment of white labour only in the carriage of mails. While awaiting the completion of these and of other measures preparatory to the introduction of the tariff, some important legislation was introduced in the shape of the Immigration Restriction Bill and the Pacific Islands Labourers Bill.

Under the Constitution, a period of two years was allowed before the imposition of uniform duties became compulsory, but the feeling, both in Parliament and amongst the people of the various States, was in favour of its early introduction in order to secure adequate adjustment of commercial relations. Before the tariff proposals proper could be tabled, however, various machinery measures, such as the Customs Bill, already mentioned, the Excise Bill, and the Beer Excise and Distillery Bills had to be dealt with. Attention was again devoted to the Immigration Restriction Bill, and the Pacific Islands Labourers Bill. After a long debate the first of these measures was passed, but not quite in the form desired by the labour organisation. The Pacific Island Labourers Bill provides for a gradual lessening of the number of Kanakas employed in the northern plantations up till 1904, and none were to enter Australia after the 31st March in that year, while no agreement was to be made, or remain in force, after the same date in 1906. As it stood, the measure met with strenuous opposition in Queensland, where it was maintained that the sugar industry would be extinguished if the Bill became law. Despite the efforts made, both in Parliament and outside, the Bill passed both Houses practically unamended, and received the royal assent at the end of the year.

While the above-mentioned Bills were before the House, in some form or another, the Treasurer delivered his budget speech, and the tariff was laid on the table by the Minister for Trade and Customs on the 8th October. Reference was made by the Treasurer to the financial considerations involved in constructing the proposals. The Cabinet had decided that £21,000,000 represented the value of goods available for taxation in a normal year, and on this amount duties had been framed to produce £2 7s. 6d. per head of revenue. In a normal year the yield from the Customs was estimated at £7,388,056, which with £1,554,345 from Excise, brought the total to £8,942,401. proposed to raise a loan of £1,000,000, and a sinking fund for redemption of loans was to be provided, such fund to be invested in Commonwealth Stock. The Minister of Trade and Customs, upon whom devolved the duty of tabling the tariff, did so with the

declaration that interstate freetrade had arrived. After stating that the tariff was neither freetrade nor protectionist in character, the Minister proceeded to detail the methods under which it had been drawn up. From the total annual value of imports into the Commonwealth, calculated at £63,000,000, various deductions, were to be made. The establishment of interstate freetrade took away £29,000,000 from this sum, and it was estimated that the total taxable balance left amounted to £21,000,000. Of this amount the value of narcotics and stimulants was £1,910,000, and the duties proposed on these articles, together with £1,131,000 from excise would yield £4,100,000. From fixed and composite duties averaging 30-94 per cent. £2,020,471 would be raised on £6,530,000 worth of goods, and ad valorem duties ranging from 10 per cent. to 25 per cent. would yield £2,362,211 on £12,583,740 worth of goods, or an average of 18.7 per cent. The excise on sugar was to be charged from the 1st July, 1902, and would cease in 1907, when, according to the terms of the Kanaka Bill, sugar would be produced by white labour. In the course of his speech the Minister indicated that the Government intended to adopt a reasonable system of bonuses to encourage the establishment or extension of industries which were not yet established, or to which protection could not be immediately extended.

It was to be expected that a tariff constructed under such difficulties as beset the framers would not meet with unqualified approval, and immediate signs were not wanting that extensive amendments would be proposed. On the 15th October the Right Hon. G. H. Reid, the leader of the Opposition, moved a vote of censure to the effect that the financial and tariff proposals of the Government did not meet with the approval of the House. After a protracted debate the motion was put to the vote on the 1st November, and resulted in a victory for the Government by a majority of 14, every member of the House being represented.

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When finally dealt with in Committee the tariff had undergone extensive alteration. Amongst the more important changes was the abolition of composite duties, a novel form of impost in most of the States, and in many instances the rates were lessened. The duties on tea and kerosene were abandoned, and the placing of these items on the free list deprived the Treasurer of some £500,000 of his anticipated revenue. abolition of these duties was viewed with dismay by the Treasurers of the smaller States, and Queensland, South Australia, and Tasmania were united in their protest. Assurance was, however, given by the Government that if it were found necessary fresh duties would be imposed at a later date. The tariff finally emerged from the House of Representatives during the second week in April, and the necessary machinery measures were thereupon pushed through. Under the Constitution the Senate has no power to alter the tariff, but it may suggest alterations, and refuse to pass the duties until such suggestions have been acceded to.