Australasian Democracy

The inhabitants of New South Wales, as of several other Australian Provinces, lived for many years in a fool's paradise. They had received a magnificent inheritance in the land and were able, owing to the proved mineral resources of the country, to draw upon a practically inexhaustible fund in the willing advances of British capitalists. All classes vied with one another, especially in Victoria, in the extravagant loans and expenditure which caused the crisis of 1893, the greatest blessing, as many think, that has ever befallen Australia. Regardless of the burdens it was imposing upon future generations, the Parliament of New South Wales, with which I shall be dealing principally in the present chapter, constructed unnecessary public works, allowed the Civil Service to be packed with the friends and relations of those in power, and authorised roads and bridges almost at the whim of each individual member. This condition of things could not continue indefinitely: on the one side, a rapidly increasing debt, on the other, an enormous army of civil servants, aspirants for employment on public works and local claimants for a share of the expenditure of loan funds, who were able, on account of the wideness of the franchise and the numerous functions undertaken by the Government, to bring pressure to bear upon the Ministry through their representatives in the Assembly. It was essential that the power to borrow should be curtailed; essential also that the possibilities of political pressure should greatly be diminished. The former object could only be achieved at the cost of a comparative loss of credit, the latter by a wise recognition on the part of the electorate of the dangers of unfettered State action under a democratic constitution.

The rapid growth of indebtedness cannot justly be laid solely to the charge of the popular representatives, as, though the Legislative Council has occasionally resisted Loan Bills, it does not appear to have realised the dangers of the proposed expenditure. Nor was it in human nature that it should have opposed the construction of railways by which its members, mostly landholders, would enormously be benefited. Were their lands to be resumed by the Government, they would obtain an enhanced price for them; in any case, many of them would gain a large unearned increment. The members of the Council who are nominated for life, similarly with Labour members, lawyers, and others who represent particular sections in Parliament, have been active mainly where their own interests have been concerned. In pursuance of their right to reject measures of taxation, they threw out Sir George Dibbs' Income-Tax Bill in 1893 and, two years later, Mr. Reid's Land and Income-Tax Assessment Bill. As landholders they objected to a land tax, and to an income tax as representatives of the wealth of the community. Nor has the extravagance been due to payment of members, which is regarded by some as the cause of all the evils of Australia, as it was not inaugurated until after the greater part of the indebtedness had been incurred; but the necessity for political safeguards has been accentuated by the entrance into Parliament of men who, owing to their pecuniary circumstances, are less able to resist the demands of their electors, are deeply interested in the postponement of dissolutions, and are more dependent upon their re-election. It would be equally false to attach any blame to the Labour Party, which did not make its appearance in the Assembly until 1891.

While the great diminution of borrowing and consequently of the construction of public works has lessened the opportunities for undue political influence, many still exist, and the number would have been far greater in the absence of recent legislation. How numerous these opportunities might be, may be gauged from the fact that, exclusive of some 10,000 railway employés, 20,000 persons were formerly in the service of the State at an annual salary of £2,600,000; that many thousands are tenants of the Crown, liable to be propitiated by the reduction of their rent; that nearly half the population live in unincorporated districts, in which the local expenditure is met out of national funds, and that the unemployed continually clamour for rations and employment upon relief works, the receipt of which, under the existing law, does not entail political disfranchisement.

The first legislative recognition of this danger is seen in the Crown Lands Act of 1884, which constituted Local Land Boards, consisting of not more than three members to be appointed by the Governor in Council, which were to consider all applications for land, insure the due fulfilment of the conditions, residential or other, which are attached to different forms of tenure, and appraise the rents of pastoral leases and the rate of compensation for improvements. The practice of the Ministry has been to appoint as chairman of a Board some experienced official of the Crown Lands Department and, as his colleagues, persons recommended by the residents in the district. I am assured that this system of Land Boards, whose decisions are subject to an appeal to the Land Court, has worked satisfactorily and that confidence has been promoted by the publicity of the proceedings. A full statement is published periodically, for each district, of the areas still open for settlement and of the conditions under which they can be taken up: the Land Boards have to inquire into the bonâ fides of the applicants. The question of the remission or suspension of the payment of rent is one of great difficulty in countries in which the Crown is the largest landholder. If a discretionary power is given to the Ministry, political pressure can be brought to bear upon them by tenants through their Parliamentary representatives; if it be withheld, great hardship may ensue. This is particularly the case in Australia, where the value of a property may greatly be reduced by the devastations of rabbits or other pests and the consequent deterioration in the grazing capability of the land, or by a fall in the price which can be obtained for stock or wool. The Land Acts of New South Wales recognise either of the above causes as sufficient to entitle a pastoral lessee to a reappraisement of his rent by a Land Board, and permit the suspension of annual payments for one year in the case of holders of land under conditional purchase who reside upon it, but compel the vast majority of tenants of the Crown to abide strictly by the conditions of their agreements, under pain of the forfeiture of their holdings. Cases of individual hardship, which would engage the attentions of a private landlord, are, in the avoidance of a greater evil, left without redress.

In 1888 two further measures were passed with a similar object, the Government Railways and Public Works Acts. In a book recently published by authority of the Government,[1 - "New South Wales; the Mother Colony of the Australias."] to which I have to acknowledge my indebtedness, it is stated that the re-organisation of the railway administration was rendered necessary by the excess of political influence, the absence of expert control, and the construction of new lines without sufficient regard to the prospects of an early remunerative traffic, which had caused the capital expenditure to have been nearly doubled while the net earnings had not increased. Under the former Act, accordingly, the Government railways and tramways, which are now about 2,600 miles in extent and have been constructed at a cost of thirty-eight millions, were vested absolutely in a Board of three Railway Commissioners to be appointed by the Governor in Council. In order that their independence might be secured, they were made irremovable except for misbehaviour or incompetency, and then only upon a vote of both Houses, and their salaries were charged on the consolidated Revenue Fund, which was permanently appropriated to the required extent. They were entrusted with the general management of the railways and with the appointment, subject to the regulations governing entrance into the public service, and dismissal, of all clerks, officers and employés, whose salaries and wages, however, are subject to the vote of Parliament. The Government were fortunate in securing the services of a very competent senior commissioner, who, with his colleagues, has been able, without lowering the rate of wages, to reduce the percentage of working expenses to gross revenue from 66.69 to 54.46 per cent., and has increased the net return on capital from 2.85 to 3.60 per cent. The result is the more satisfactory that the railways are not worked solely with a view to profit, but in such a manner as to benefit the population as a whole and to encourage the remote farmer and pastoralist. The experience of the other Australasian Provinces which established similar Boards proves it to be essential that the commissioners should not only possess great commercial ability, but be strong men who are able to withstand the pressure to which they will be subjected and are regardless of the attacks which are likely to follow upon their refusal of favours.

The Public Works Act provides for the appointment of a Parliamentary Standing Committee on Public Works, which is to consider and report upon all proposals for the construction of public works, except such as are connected with the military or naval defences of the Province, where the estimated cost exceeds £20,000, and upon any similar proposals involving a smaller expenditure, which may be submitted to it by the Governor in Council. It consists of thirteen persons, eight members of the Assembly and five of the Council, who are appointed for the duration of a Parliament and receive remuneration at the rate of three guineas for each sitting and thirty shillings a day for travelling expenses where the sittings are held at a distance from Sydney. The Secretary for Public Works nominates an equal number from both sides of the House after consultation with the leader of the Opposition; in the majority of cases these nominations are challenged and the appointments are made by ballot of the whole House, which, according to trustworthy information, leads to disreputable negotiations between those who desire the additional salary and those who are able to confer it. It has been suggested recently by a Royal Commission, which reported that "the expenditure on public buildings is in excess of what is necessary, owing to the system of political interference, which is responsible for the erection of special post offices in country townships where shops could be used, and of costly courts of justice and other structures which are not required," that all proposals for public expenditure involving a probable outlay of more than £5,000, should be considered and reported on by a committee consisting of the permanent heads of the Public Works Department, the Treasury, and the Department on whose behalf the proposed expenditure would occur. But the adoption of this suggestion would not go to the root of the evil, which lies in the manner in which small public works of a purely local character are carried out in rural districts. In the early days of the Province the Government, in order to widen the area of settlement, constructed all roads, bridges, and other local works out of national funds. As population increased, municipalities were established, which rated themselves for local purposes and received subsidies from the Government proportionately to the amounts thus raised; but the Act of 1867, which contemplated the extension of the system, provided that new municipalities, either boroughs or municipal districts, could only be created upon the receipt of a petition signed by a stated proportion of the prospective ratepayers. The Councils of such municipalities have the right to levy rates not exceeding two shillings in the pound in one year upon all rateable land within their borders, and receive from the Government during the first five years a sum equal to the whole amount actually raised in this manner or from any other specified source of revenue. This is gradually diminished until, at the end of fifteen years, no further subsidies are received, except such as have specially been voted by Parliament. At the present time, owing to the absence from the Act of any compulsory provision, the incorporated districts of the Province comprise somewhat more than half of the population, but less than one hundredth of the total area. Successive Governments have recognised the evil, but have failed to pass a satisfactory Amending Act which would establish some form of local government in the unincorporated areas and compel them to pay a fixed portion of their local expenditure. The estimates for such expenditure are framed by the Public Works Department, and are based upon the reports of its resident engineers and of the agents of the Government Architect. The opportunity of the pushing rural member occurs upon the expenditure of the unappropriated sum of money which is left in the hands of the Minister, to meet requirements that cannot be foreseen; in this connection, members may threaten a withdrawal of their support and ministers may seek to win over new adherents. The reports of such actions are probably much exaggerated, as there are many who delight in vilifying the Assembly, but the popularity of a rural representative depends undeniably on the number of public works which the Government carry out in his district.

The next important step was the appointment, early in 1895, of a Royal Commission to inquire into the Civil Service, which reported that the Act of 1884, under which a Civil Service Board of five persons had been constituted, had failed in its purpose, because the Board consisted usually of men who had other duties to perform and had not the power to fix the salaries or control the service, and because the right was reserved to ministers in special cases to make appointments without either examination or probation. The Commissioners found that, owing to the absence of any well-ordered system of classification, the grossest inequalities and anomalies existed in the salaries of offices attached to different departments or even to the same department, as, to take an extreme case, that, in the department of the Government Architect the official who designed the Crown Lands office and supervised its erection was receiving less remuneration than the principal messenger; and that, while the service contained many high-minded and able officials, there were cases where incompetency, neglect of duty, and even drunkenness had formed no bar to continued employment. In accordance with their recommendations, founded on the belief that Parliament could not directly cope with the matter, an Act was passed in 1895 which constituted a Public Service Board of three persons, to be appointed for a period of seven years in the same way, and with the same securities for independence, as the Railway Commissioners. The Board was charged with the duty of making a thorough investigation, which was periodically to be repeated, into the working of each department, and of fixing the number, grade, and salary of the officials. Future appointments and promotions were to be made by the Governor in Council, upon a certificate of the Board, subject to the regulations in regard to competitive examinations and an obligatory period of probation upon entrance into the service. As the Commission had reported that it should be possible to effect an annual saving of a quarter of a million, special importance attached to the provisions which enabled the Board to dispense with the services of those who could not usefully and profitably be employed, such persons to receive gratuities on a fixed scale upon their retirement. The Board were sitting during my stay in Sydney and had to suffer from the open hostility of those who had been affected by their decisions and from abusive correspondence in the press. Their impartiality was impugned, and they were charged with allowing themselves to be influenced by the wishes of Ministers; but when the unpleasant task of retrenchment has been completed, they will doubtless carry on a work of practical utility unhampered by criticisms and accusations.

No serious attempt has yet been made to deal with the problem of the unemployed, which is the more urgent from the fact that the receipt of relief does not disfranchise the recipient. Its origin must be sought in the extensive Public Works policy of the past, which absorbed immigrants who would otherwise have settled on the land. In 1887 the majority of the great undertakings had been completed, and many thousand men, thus thrown out of employment, drifted into Sydney and led the Ministry to establish a casual labour Board, which was discontinued after a year, but spent £252,000 in the relief of destitution. In the following years other causes intensified the distress: the great strikes of 1890 destroyed confidence and deterred enterprise; the Broken Hill strike and the recent strike at Newcastle have had similar effects, the latter having struck a blow at the export trade in coal, which was gradually recovering from earlier disturbances; the collapse of 1893 cast adrift a large number of mechanics and clerks whose services had been required during the period of inflation, the fall in the price of wool caused a shrinkage in private expenditure, and the severe drought experienced during the latter part of 1895 had disastrous effects on the labours of those employed in mining, pastoral, and agricultural pursuits. To meet the difficulty a Labour Bureau was established at Sydney in 1892, in order that the unemployed might be able to register themselves and might be helped to obtain work; but, while much has been done in this direction, no more satisfactory solution has been found for the problem, as a whole, than continual relief works, which attract the destitute from country districts and other Provinces, and afford merely temporary alleviation of the distress. According to a recent report of the Superintendent of the Bureau, to whom I am indebted for information, £201,000 were spent during the year ending February last (in a population of a million and a quarter) upon works in aid of the unemployed, an expenditure of which two items alone, £50,000 for forest thinning and £35,000 for railway deviations, can be supposed to have had any other justification. Mr. Creer told me in June, 1896, that the daily attendance at the Bureau had averaged for several months 1,500 to 2,500, but had decreased latterly to 300 to 500; that many who had been given employment had abandoned it, and that, where a large number had been working together, he had had much trouble owing to their rowdiness and bad behaviour. On this point the Premier, Mr. Reid, stated that he had been informed, on good authority, that there were not more than 1,500 genuine unemployed in Sydney, but admitted, quoting his informant, that "there are also hundreds of men who do little or no work" and "a large number of men who have been identified with the unemployed agitation for the past ten years, and who appear to delight in its existence, as no doubt they consider it a capital cover to pose as bonâ-fide workmen out of employment." The conduct of the latter is mainly due to the weakness of successive Ministries, which have failed to resist pressure and may almost be said to have encouraged idleness. Such encouragement is also provided in the climate of Sydney, which enables men to sleep in the open for nine months of the year without discomfort. Mr. Creer proposed that those who profess to be willing to work should be employed upon schemes of water conservation and irrigation in the drier parts of the Province, which should be carried out by gangs of men under strict supervision, and that the confirmed loafers should be placed in Industrial Homes and be compelled to choose between work and starvation. The present Government have established thirty-five branches of the Labour Bureau, which will tend to prevent the unemployed from flocking into the Metropolis. But the bulk of the unemployed at Sydney are demoralised by idleness and ignorant of agricultural pursuits, and can only be dealt with by a strong Minister who, regardless of political consequences, will discontinue the system of indiscriminate relief and treat the confirmed loafers with the greatest severity.

Democratic government, actively opposed by some and detested by most of the more educated members of the community, is firmly established in New South Wales, and is essential to the happiness of the people there as elsewhere in Australasia, in the general prevalence of purely commercial instincts and the absence of a landed class which is bound by inherited traditions to take an interest in its dependents. Of recent years the democratic movement has been more rapid: payment of Members of the Assembly dates from 1889, Sir George Dibbs passed manhood suffrage in 1893, and Mr. Reid seeks to curtail the power of the Upper House. A great impetus has been given by the Labour members, whose numbers and influence entitle them to be regarded as one of the most important political factors in the Province. The reason for the formation of a separate party has thus been explained to me by one of its members: the prominent men among the working classes, who were anxious to promote progressive legislation, were hampered by the fact that they disagreed upon the question of the tariff, and that their votes were, consequently, useless as far as the advancement of such legislation was concerned. The line of cleavage in the Assembly was between Protectionists and Free Traders; reactionary and advanced views were represented on both sides of the House. They felt, therefore, that labour would be powerless unless the issue of the tariff were explicitly sunk and a programme put forward which would concentrate the votes of the working classes. In their campaign they were doubtless aided by the Act passed for the payment of members, and by the failure of the maritime and other strikes, which impressed Trades Unionists with the necessity of seeking to attain their ends by other means. A programme was, accordingly, drawn up, of which the principal items were, in order of importance, Electoral Reform, the Right of Mining for Gold on Private Land, and the Taxation of Land Values; it was adopted at the elections of 1891 by a large number of candidates who came forward in the Labour interest and succeeded in winning thirty-four seats. Upon the meeting of Parliament it was decided by the Party, although the majority had Protectionist leanings, that support should be accorded to Sir H. Parkes, who had made Electoral Reform the principal item of his policy. A few months later he was defeated on the Coal Mines Regulation Bill, and the votes of the Labour Party were transferred to his Protectionist successor, Sir G. Dibbs, who also favoured Electoral Reform; but, in the meanwhile and subsequently, many of the Labour members refused to leave their views on the tariff in abeyance, with the result that the number of those who adhered staunchly to the programme was reduced to five or six. In spite of these defections, the first two items in the programme were carried and the Taxation of Land Values took the foremost place. At the 1894 elections the Labour Party had been much discredited, but secured fifteen representatives, in the Assembly of one hundred and twenty-five, who were pledged to the so-called "solidarity" vote. Their support was then transferred to Mr. Reid, the present Free Trade Premier, who was in favour of the Land Tax, which they enabled him to carry in 1895, though only after a further election, caused by the action of the Upper House, at which they carried three additional seats. At present the Labour Party are concentrating all their efforts upon the abolition of the Legislative Council and the substitution for it of the referendum, which they regard as a necessary preliminary to the passage of advanced legislation, and are prepared to accept, as a step in the right direction, Mr. Reid's proposal that the tenure of the members of the Council who are nominated for life should be reduced to a period of years, and that all-important Bills, upon which the Assembly and Council have failed to agree in two consecutive sessions, should be referred to a plebiscite. They argue that when the electors realise that the Council can only delay legislation for one session, and that the issue is then directly referred to them, they will sweep it away as a mere obstacle in the path of progress. It may be doubted whether the adoption of the plebiscite would have the results that they anticipate, but it cannot be doubted that a compact body of representatives, aiming at the democratisation of the constitution and willing to support whichever party makes the highest bid for their votes, have but to remain united to achieve their object, especially when it is in accordance with the natural evolution of Parliamentary government. The Labour members have a definite programme upon which all their efforts are concentrated, but are chary of giving their views upon other questions, as their votes, in consequence of the common pledge, will depend on the decision of the majority of the party. Great indignation is expressed at the "caucus" meetings, at which the votes of all are thus determined; but it is difficult to see wherein the conduct of the Labour members differs essentially from that of the representatives who support one of the principal parties in the State. In both cases certain main objects are sought and individual convictions are, on occasion, subordinated to their attainment; the only difference is that, in the latter case, the action is taken voluntarily in order to maintain a party in power; in the former, its expediency is determined by the majority of those who are united in a common purpose. On the other hand it must be admitted that the Labour Party display, at present, all the irresponsibility of independence, and have often acted in such a manner as to justify the hostility of their opponents. During my stay at Sydney they attempted, on one occasion, to convert the Assembly into a court of judicial appeal; on another, to interfere with the actuarial calculations of insurance societies.

The importance of political safeguards is accentuated not only by the accelerated movement in the direction of constitutional change, but by the increasing belief in the efficacy of State control and state interference. During the session of 1896 the Government brought forward measures dealing with the conservation of water, the public health, adulteration, and the regulation of coal mines and of factories and workshops, the passage of which would necessitate a considerable increase in the number of State officials; and the Labour Party, the transference of whose support would place the Ministry in danger of defeat, have shown, by their votes in the past, their conviction that all new public works which are in the nature of a monopoly, should be constructed and owned by the State.

The scope of my inquiries in New South Wales led me in directions which have caused me to emphasise the darker sides of political life; but I wish to guard against the inference that similar shadows could not have been found elsewhere, and have touched upon the subject in my general observations upon Australasian tendencies. In fact, I may add, I was drawn into my particular line of study at Sydney by the knowledge that New South Wales had taken especial precautions, except in regard to the unemployed, against the evils which I have here sought to summarise. The predominant note in that Province is one of hopefulness: the vast pastoral, mineral, agricultural, and other resources of the country, the harbour at Sydney which renders it the natural centre of the foreign trade of the Continent, and the rapidity of the recovery from the crisis of 1893, are calculated to inspire confidence in the future; as are the high average wages of the working classes, the low cost of living, and the short hours of labour. But the most impressive sign of a healthy national life is the readiness of the democracy to recognise the dangers inherent in its rule, and to divest itself voluntarily of some of its powers, in the interests of pure and upright government.

III

PROBLEMS OF QUEENSLAND

The agitation of Central and Northern Queensland for separation from the South—The "Kanaka" traffic—White and coloured labour on the plantations—The Sugar Works Guarantee Act—The irregularity of employment in the sugar and pastoral industries—The conditions and opinions of the shearers—Assistance to dairymen and producers of frozen meat—The Labour Party, its history and prospects—Criticisms of the Government—The principles of State action.

In the Southern Provinces of Australia, Sydney, Melbourne and Adelaide are not only the political capitals, but have become naturally, from their geographical position and other advantages, the points of departure of the trunk lines of railway and the centres of commercial and intellectual activity. In the case of Queensland, Brisbane, which was selected as the capital because settlement was almost confined to its neighbourhood, had to compete with several other good harbours; it is situated at the south-eastern extremity of a vast territory, and is connected only by sea with the northern parts above Bundaberg. The existence of this means of communication caused successive Governments to postpone the construction of a coastal railway in favour of lines running from East to West which would promote the development of the pastoral resources of the interior by affording access to the nearest port; but these lines, which start from Brisbane, Rockhampton, and Townsville, and have a respective length of 483, 424, and 235 miles, have tended, by increasing the importance of the latter places, to foster in their inhabitants a feeling of jealousy at the supremacy of the former and of antagonism of interests with the South. The climatic conditions also are divergent: the Centre and South are semi-tropical; the North, which lies wholly within the tropics, contains a low fringe of fertile land along the coast, suitable for the cultivation of sugar, and the cause of the constant struggles which have surrounded the question of the employment of coloured labour.

The establishment of Queensland as a separate Province dates from 1859, and was at once followed by an extension of population to the Northern districts, and a few years later by the growth of a demand for separation, which culminated in 1871 in a petition to the Crown, in which the desire was expressed that the country to the North of the Dawes Range, which lies between Gladstone and Bundaberg, should be created into a new Province, on the ground that the absence of regular communication between the capital and the Northern settlements rendered good government and the administration of justice very difficult and uncertain. During the succeeding years the agitation flickered in the North and was latent in the Centre, which had been conciliated by the construction of its railways and appeared to have identified itself with the South. Some ten years ago the Northern members pressed their claims very strongly, and more recently the Central members have petitioned the Crown, sent a deputation to the Colonial Secretary, and brought their case before the Queensland Parliament.

The arguments advanced by the Northern and Central separationists are similar in character, and if recognised as valid in the case of the Centre, must be doubly so when applied to the North, owing to its greater distance from the capital and the difficulty of communication with many of its outlying districts. The boundaries adopted by the separationists are those laid down by the Real Property (Local Registries) Act of 1887, under which the Province was divided into three parts, of which the Northern contains 255,000, the Central 223,000, and the Southern 190,000 square miles.

The claims of the Centre, to which I have been able to give more attention, as I spent some time in that district, are based not only upon alleged unjust apportionment of expenditure, defective administration, and financial hardships endured under the protective tariff for the benefit of Southern manufacturers, but upon the inherent and inalienable right of a community of free British people. It is pointed out that Central Queensland is in a more advanced position than were Victoria and Queensland at the time of their separation from New South Wales; that it returns less members than the city of Brisbane and the country within a radius of ten miles of it; and that the Northern and Central members, even if unanimous in favour of separation, would only number twenty-seven as against the forty-five representatives of the South, and are bound, apart from the constitutional aspect of the question, to look to the intervention of the Imperial Government. The most important utterance from this source is the reply of Sir Henry Holland, now Lord Knutsford, to the Northern deputation, in the course of which he said that "there is no instance of recent years, since the Colonies attained the greatness they have, of the Imperial Legislature passing an Act interfering with the administration of one of those great Colonies, except at the request of the Colonial Government. Therefore I say it is difficult, if not undesirable, to deal with such a question as this unless we have the authority, on a desire expressed on the part of the Colonial Legislature, or unless there is some case made out which is absolutely overwhelming;" and Mr. Chamberlain recently stated, with reference to Central separation, that, even if local agreement had been reached, the difficulties and risks attending any attempt to divide the Province were, under existing circumstances, very great. He clearly appreciated the hostile feeling that would be aroused throughout Australia by any interference on the part of the Imperial Authorities with the internal government of an Australian Province. As the separationists do not hope to obtain a majority in the Queensland Assembly, they are likely to be ardent advocates of Federation, especially if a clause be inserted in the Constitution which would enable the Federal Government to subdivide a Province without the consent of its Parliament.

The Southern members are influenced by the fear that, under separation, they would lose the Northern and Central markets. To meet this objection, a resolution was moved in the Assembly by one of the members for Rockhampton that the separation of Central Queensland was desirable, but on such terms that the interchange of natural products between the two Provinces should continue to be free from tax or duty; but the proposal, which was seen to be fraught with endless difficulties, has not been regarded seriously. The question has also arisen in what manner the liability for the public debt would be distributed in the case of separation, but it is contended that the matter would be settled under the Imperial Act of 1861, under which both Provinces would jointly be liable for the whole debt, and machinery is provided for arbitration as to the proportion of it which would be borne by each of the Provinces.

The necessity for some form of decentralisation has been recognised, and partially acted on, by successive Ministries since 1877, when a Royal Commission was appointed to inquire into the best means of bringing about a more equitable distribution of the revenue. The system of Local Government, introduced in 1878 and extended in the following year to rural districts, lessened the direct control exercised from Brisbane, and handed over to elective Municipal Councils and Divisional Boards the expenditure of the revenue raised for local purposes. In 1887 local registries of titles to real estate were established at Townsville and Rockhampton, and Sir S. Griffiths introduced a Financial Districts Bill, to divide the Province into three districts and to provide for separate accounts of revenue and expenditure. The Bill was not passed, but separate returns have since been published, which do not, however, give a full statement of the contributions of the different districts to the revenue. In 1892 the same Minister introduced a Constitution Bill, in which he proposed to place Queensland under a federal system of Government, a General Assembly of the United Provinces, and three Provincial Parliaments. In the course of discussion the number of Provinces was reduced from three to two, to the exclusion of the Centre, which was to retain its connection with the South. The Bill passed the Assembly, and was thrown out by the Council, principally on the ground that it had not been supported by the statutory two-thirds majority. The Central Separationists were naturally opposed to the Bill in its amended form, and public opinion in the North was equally hostile. It was pointed out that the expenses of government would greatly be increased, even more than under territorial separation, and that the powers of the Provincial Parliament would be so limited, in the absence of control over the railways and the customs tariff, that the North would not enjoy the enhanced prosperity which, under an entirely separate Government, would make it indifferent to the additional expenditure. The appointment of a judge of the Supreme Court to reside at Townsville, and, since last year, at Rockhampton, has lessened the expenditure and loss of time involved in legal proceedings initiated in the Northern and Central Districts. In the Ministerial measure dealing with the election of delegates to represent Queensland at the Australian Federal Convention, which failed to become law owing to an insoluble deadlock between the two Houses, it was proposed that, of the ten delegates, three should be elected by the Northern and two by the Central Parliamentary Representatives, a greater proportion than would be warranted by their respective populations as compared with that of the South. The Premier, Sir Hugh Nelson, defended the liberality of this proposal on the ground that "it is of the utmost importance that in any federal constitution provision should be made for the division of existing Colonies and the terms on which such divisions shall take place;" adding that "the Northern and Central districts have a perfectly legitimate aspiration: they are looking forward to the day when they will be formed into separate states."

The above remarks embody the views of many South Queenslanders who look forward to eventual separation, but are not prepared to advocate it at present; the Central separationists, on the other hand, contend that the question is ripe for immediate settlement, and, as a proof of popular feeling in the matter, point out that ten out of the eleven representatives of Central Queensland are pledged to separation, and that numerous petitions were handed to the late Governor, Sir Henry Norman, on the occasion of his tour through the district. Personal observation and inquiries directed to all with whom I came in contact, have convinced me that the enthusiasm for separation is greatly on the wane in the Centre, owing to the strength of the Labour Party, which, in 1896, carried a majority of the Central seats, and to the inevitable reaction which succeeds a period of excitement. The owners of property and tradespeople of Rockhampton have everything to gain by a change which would make their town the capital of a province; the miners at Mount Morgan and the shearers are indifferent, though the latter, judging from a conversation which I had with some twenty of them, have a vague idea that under separation the Labour Party, of which they are supporters, would be in a stronger position; and the pastoralists, who direct the principal industry of the community, are practically unanimous in their opposition: they have obtained the railway which has opened up the Western Downs, and they dread the predominance of the Labour Party and of Rockhampton, the inhabitants of which, they maintain, have shown little regard for their interests.

As regards the feeling in the North, I have been told by one of the Northern members, himself a supporter of separation, and by others, that the agitation is at present dormant. The election of local men has been promoted by the payment of members; previously most of the Northern representatives were inhabitants of Brisbane, who were out of touch with the feelings and interests of their constituents. Material and political considerations also have exercised great influence. The sugar planters, ardent advocates of separation as long as the importation of coloured labour was forbidden, have been staunch supporters of the Union since the removal of the prohibition and the passage of the Sugar Works Guarantee Act. On the other side, the Labour Party, who share in the hatred of coloured labour which is common to the working classes throughout Australasia, opposed separation while it was likely to lead to its legalisation, but have been encouraged by their present strength, the tenure of seven seats out of sixteen in the Northern district, in the belief that, if they obtained separation, they might hope again to exclude it, and would have an opportunity of giving effect to their general political views.

The "Kanaka" question has been so fully discussed in the press and in numerous pamphlets, that the Imperial and Provincial Acts, which first aimed at the protection of the islanders, may be dismissed with the remark that they are admitted in Queensland to have had abundant justification. The conditions have been made successively more stringent until, at the present time, it is almost impossible that any Kanakas should be taken against their will, ill-treated on the voyage, or oppressed upon the plantations. Government agents, to give a brief summary of the Acts, accompany all recruiting vessels and are bound to see that the islanders understand the nature of the agreement into which they are about to enter, as to rate of payment, and duration of service; that every return passenger is duly landed along with his property at his own village or district, and that the islanders receive the prescribed provisions and clothing on the journey, and are otherwise treated in accordance with the regulations. Inspectors receive the vessels upon their arrival in Queensland, superintend the signature of the agreements, and, generally, are responsible for the welfare of the labourers during their residence in the country. In the case of sickness employers are bound to provide proper medicine and medical attendance, and they may be called upon to contribute towards the maintenance of a hospital. The contentment of the labourers may be inferred from the fact that a large proportion re-engage themselves upon the expiration of the term of three years, and that, of the 1,305 who were landed during the year 1895, 250 had previously been employed in Queensland. As the result of frequent intercourse, the conditions are well known in most of the islands from which the labourers are recruited. According to official figures, the number of islanders in Queensland increased in 1895 from 7,853 to 8,163, of whom nearly two-thirds are in the districts of Mackay and Bundaberg; all are employed on the cultivation of sugar, with the exception of a few at Thursday Island, who are engaged in the bêche-de-mer and pearl-shell fisheries.

It would seem that the only valid objection which can now be made against the system, except by those who disagree from the whole thing on principle, is, that it may lead to the gradual depopulation of some of the islands by the withdrawal of a considerable proportion of the adult males of marriageable age. It may be noted, in this connection, that the islanders have also been recruited for Guatemala, if not for other countries.

The mode of cultivation and the treatment of the raw material have been modified during the last few years. At first the cane was grown solely in large plantations, each of which possessed a separate mill and treated only its own produce; but as prices fell and the local demand was overtaken, more scientific methods began to prevail. It was found, on the one hand, that the cane could be treated most economically on a large scale; on the other, that few plantations were sufficiently extensive to keep a large mill at work during the whole season. To meet these conditions, central mills were constructed and the land was in many cases subdivided, and let or sold on a system of deferred payments to farmers, who were encouraged to cultivate it in small areas, and to send their cane to the factories. The interests of the mill-owner and the farmers should be identical; the former is anxious that his mill should be worked to its full capacity, and has every inducement to dispose of his land upon terms favourable to cultivators; the latter have a sure outlet for the disposal of their produce. In 1894, fully 40 per cent. of the 80,000 acres under cane was cultivated in areas of ninety acres and under. An impetus was given to this movement by the temporary prohibition of the importation of islanders, which compelled planters to consider the possibility of an alternative to coloured labour, and by a vote of £50,000, by means of which two central mills were erected for groups of small farmers. The success of these mills induced the Government to pass the Sugar Works Guarantee Act, under which "any company which can give the Government security in land, has the requisite cane crops growing for a fair season's mill work, and can show that it has an area of land capable of supplying the mill with a full crop, can obtain the sanction of the Government to accept a tender for the erection of a factory, the State guaranteeing the interest and the redemption of the debentures issued in payment for it. By this measure the country has not only supplied the means for the steady development of the industry, but has taken, in its belief in the soundness of the enterprise, a direct interest in it. No surer guarantee can exist than this law, that the Parliament of Queensland will in future safeguard the prosperity of an undertaking in which the State has so keen an incentive to protect itself from loss."[2 - Quoted, by permission of the author, from an article contributed to the Australasian Review of Reviews by Mr. J. V. Chataway, one of the members for Mackay.] The contingent liability incurred by the State in the year ending June, 1895, was £157,000, and in the preceding year £44,000: the amount is likely to be increased, as the construction of seven additional mills has been conditionally approved of, but, under an amending Act of 1895, is not to exceed a total of £500,000. The Premier sees no reason to suppose that, with proper management, any of the new factories will fail to meet their liabilities to the State.

Under these circumstances the question arises whether coloured labour will permanently be necessary, the answer to which depends upon the ability of the white man to become acclimatised in a tropical country. "If the white man," to quote a prominent Queenslander, "can live and work and bring up his children in the tropics of this continent, then assuredly the time will come when we shall require coloured labourers to cultivate our cane no more than do the continental sugar-beet farmers require coloured men to do their field work. Where can we look for proof of the European's ability to work and live in the heated North? He works on railways and in mines now, but there is an entire lack of evidence that his children and his children's children can continue to do so with unimpaired health and vigour. Again, it has to be seen what will be the normal death-rate in the North. It has been heavy, but we have yet to estimate the lowering of that rate as the malarial swamps are drained, and the dense tropical scrubs cleared away.... Time alone can solve this question thoroughly, though it may be permitted one to say that so far there is ample reason to think that the evidence is accumulating in favour of the European's ability to permanently inhabit and cultivate our tropical lands. There is some satisfaction in noting, for instance, that, despite the increased settlement in Northern Queensland, the death-rate for the Colony has fallen from 22.97 Per 1,000 in 1884 to 12.08 in 1894."[3 - See footnote p. 66.] The rate of mortality among the Kanakas is reported officially to have been 40.62 per 1,000 in 1894, and 29.64 in 1895. Their employment is absolutely prohibited in the mills, and is restricted to certain forms of work upon the plantations. The Government are anxious to replace the Kanakas gradually by white labourers and to settle the tropical littoral with a population of small farmers. This object, however, it is contended, cannot be attained without the temporary employment of coloured labour. Another aspect of the question may be noted: granted that white men cannot at present do all the work upon the plantations, Kanakas are preferable to Orientals, whether Chinese or Japanese, who would remain permanently in the country. Even in Queensland, though less than in the Southern Provinces, such a state of things would be regarded as eminently undesirable.

A considerable demand for white labour has thus been created, the extent of which may be gauged from the figures given to me by a planter who has 3,000 acres under cane in the neighbourhood of Bundaberg. Upon land which formerly carried 800 head of cattle and gave employment to a single married couple, he now employs 300 Kanakas and 80 white men during the whole of the year, and 120 additional white men during the crushing season, which lasts, as a rule, from June to December. The latter are compelled to shift for themselves during the remaining months of the year and wander about the country in the search for casual work; many, it is said, seek it in the agricultural districts of the Darling Downs.

The people of Queensland are confronted with a serious problem in the fact that of the three principal industries of the countries, mining alone affords regular and constant employment, and that only on proved goldfields. In the sugar industry, as stated, about 40 per cent. of the labourers, exclusive of the islanders, are permanently employed, and in the pastoral industry the proportion is even smaller. On a typical sheep-station in the Central district which carries 80,000 sheep, the permanent staff number only 19, and are supplemented at shearing time by some 25 to 30 shearers and as many more workmen who pick up, sort, and pack the fleeces. The shearers with whom I conversed bewailed the irregularity of their employment; they work at high pressure for a few months in the wool-sheds, and have no fixed occupation during the remainder of the year. I was favourably impressed by the men, and was informed that, as a class, they have much improved of late years, and that many of them have considerable savings. Allowances must be made for workmen who are herded together, good characters with bad, and lead a nomadic and demoralising existence which lacks the sobering influences of sustained industry and domestic associations. Recent Ministries have been alive to the importance of this question and have aimed at the gradual diminution of the size of pastoral properties held from the Crown. The Land Act of 1884 divided them into two equal parts, over one of which the holder was offered a fixed lease for 21 years, while the other was to be subject to resumption by the State as the demand for the land might arise. Under this provision large tracts of country have been thrown open for occupation as grazing farms of from 5,000 to 20,000 acres and have been eagerly taken up, as many as twenty applications having been received for a single farm where the quality of the soil has been exceptionally favourable. The Act of 1894, passed by the present Government, established a new form of tenure which was intended to meet the special requirements of the shearers. Grazing homesteads not exceeding 2,500 acres in area may be acquired at a low rental, subject to the condition that the selector must reside upon the land for not less than six consecutive months in each year during the first ten years of his lease; but, under license from the Land Board, the selectors of two or more homesteads may co-operate to work their holdings as a whole, in which case residence by one-half of the whole number of selectors will fulfil the conditions of occupation. Some of the shearers may, from the force of habit, be incapable of a settled existence; but many of them proclaim their desire to occupy land and are hereby afforded an opportunity which they have scarcely at present realised. The attractiveness of this form of tenure will be increased if the Government pass their proposed legislation to authorise them to sink bores for the supply of water to the smaller holdings.

A better state of things prevails upon the Darling Downs in the south of the Province, where the shearing is done by cultivators and others who are in regular employment. This part of the country should eventually carry a large resident population engaged in the growth of cereals and in dairy-farming. To promote settlement and "in the strong belief that Queensland is capable of and will soon be supplying not only her own requirements, but also of exporting largely of her surplus farm products, the Government have made provision in connection with the Torres Strait Service for the carriage of farm and dairy produce in large quantities, and have also submitted to Parliament a measure for the appointment of an additional Minister, to be charged solely with the development of agricultural interests, and have taken the necessary steps for the establishment of an agricultural college within a reasonable distance from Brisbane."[4 - Financial statement 1896, p. 14.] The export of dairy produce has been encouraged by the offer of a bonus, and the construction of butter factories by loans, the funds being obtained from a portion of the proceeds of a tax imposed upon owners of sheep and cattle by the Meat and Dairy Produce Encouragement Act of 1893. The remainder is expended in advances to proprietors of meat works, and it is provided in a subsequent Act, that the amounts received in payment of interest or repayment of the principal of the loans, may be refunded to the payers of the tax. The progress of settlement has been retarded by the alienation from the Crown of much of the land that is most suitable for the purpose, both in quality and situation. The freehold has in many cases passed to financial institutions, which, having advanced upon it an amount greater than the present value as depreciated by the fall in prices, are unwilling to sell the land and to reconcile themselves to their losses. The Government have been authorised by the Agricultural Land Purchase Act of 1894, to expend a sum not exceeding £100,000 a year in the purchase, under voluntary agreement, of land suitable for agricultural settlement which is to be offered for selection in agricultural farms, and have made considerable use of their powers, but the system has not been sufficiently long in operation to enable an estimate to be formed of its results.

The irregularity of employment has engendered among the working classes a widespread feeling of discontentment, and constitutes one of the main causes of the numerical strength of the Labour vote, which amounts to about 34 per cent. of the whole. The Parliamentary Labour Party in Queensland differs from that of the other Australian Colonies in its close identification with directly socialistic aspirations. It was founded to give effect to the political platform of the Australian Labour Federation, published in 1890 under the influence of the communist, William Lane, which advocates "the nationalisation of all sources of wealth and all means of producing and exchanging wealth;" its organ, The Worker, writes under the motto "Socialism in our time," and several of its members publicly admit that they are Socialists. Others, however, who look forward to the possibility of an alliance with a reconstructed Opposition ask to be judged solely by the programme of the party which contains no distinctly socialistic item, in the popular acceptation of the term, except the establishment of a State Labour Department to which men may apply as a right for work at a minimum wage; but they will have difficulty in overcoming the general impression, which their opponents, not unnaturally, do all in their power to intensify.

The Party first came into prominence at the elections in 1893, when they won fifteen seats out of seventy-two, and have nothing to show in the way of practical legislation to counterbalance the undoubted consolidation of the forces of their opponents. A comparison suggests itself with the success of the Labour Parties in New Zealand and South Australia which have co-operated with progressive Ministers in the enactment of measures of social reform. In the latter case, the Labour Party have been so moderate in their programme, speeches, and actions, that they have carried a quarter of the seats in the Legislative Council, and thus prove themselves not to have alienated the householders and small owners of property who form the bulk of the electorate for that House. In New South Wales the Labour Party have been able, by opportunistic transfers of their votes, to secure electoral reform and the taxation of incomes and land values. The position of affairs in Queensland is not analogous; the coalition of Sir S. Griffith and Sir T. McIlwraith practically destroyed the Opposition, and made it necessary for the Labour Party to trust almost entirely to their own efforts, which should have been directed towards the concentration of all the progressive feeling of the community. Their policy, on the contrary, has deprived them of the support of many who are dissatisfied with the Government, and has not materially strengthened their hold upon the working classes. Though they carried twenty seats in 1896, they only polled 964 more votes than in 1893, nor have they improved their position in the House, as, even should they be supported by the ten Oppositionists and Independents, they would be confronted by a solid phalanx of forty-two Ministerialists. It may be of interest to note that their principal successes have been gained among bushmen and miners, but that they also hold the sugar district of Bundaberg, two agricultural constituencies, two seats at Rockhampton, and three in the poorer and outlying parts of Brisbane.

The complaints of the Labour Party against the Government were directed mainly to their failure to amend the electoral laws or to pass humanitarian legislation, and to the stringency of the Peace Preservation Act of 1894. Apart from their obvious objections to the plural vote of persons holding property in different divisions, they contend that many miners and shearers are permanently disfranchised, as they are neither householders nor reside for six months in the same place, and that persons qualified to be registered are impeded by the provisions which oblige them to fill in a claim in which, among other things, they have to state their qualification, and to get the claim attested by a justice of the peace, electoral registrar, or head male teacher of a State school. The Peace Preservation Act was passed at a time when a serious disturbance had arisen from a strike of shearers in the pastoral districts of the West, on the ground that the ordinary laws of the Colony were insufficient for the prevention, detection, and punishment of crime in such districts, and was as strongly justified by some as it was condemned by others. The Act authorised the Executive to proclaim districts which should come under its operation, and to appoint such district magistrates as might be necessary for carrying its provisions into effect. These may be summarised in the words of the Hon. T. J. Byrnes, the Attorney-General: "The first portion of this legislation is to give us power to put an end to the carrying of arms and the sale of arms in the districts that have been disturbed… It is proposed in the second part of the Bill that inquests on crime may be held… The third portion of the Bill deals with the power of arrest and detention of persons under suspicion." Under the latter heading persons suspected of crime committed in a proclaimed district could be arrested by a special or provisional warrant, in any part of Queensland, and be detained in prison; but it was provided that such persons should be treated as persons accused of crime and not as convicted prisoners, and that no person "should be held in custody under a provisional warrant for a longer period than thirty days, nor under a special warrant for a longer period than two months, without being brought to trial for the offence stated in such warrant." In justification of the measure, the same Minister quoted cases in which woolsheds had been burnt and the police and private individuals had been fired upon although no actual loss of life had occurred. A stranger cannot form an opinion upon the question and can only note, on the one side, that the operation of the Act was limited to one year, that it was most judiciously administered, not more than one district, under a single district magistrate, having been proclaimed, and that it brought about the speedy cessation of the troubles; on the other, that no attempt was made by the Government at mediation between the opposing parties, although, to quote the Attorney-General again, they "knew that labour troubles of an aggravated nature were likely to occur." A Bill "to provide for conciliation in industrial pursuits" is included in the programme of the Government.

As regards the necessity for humanitarian legislation, reference can be made to the evidence given before a Royal Commission in 1891. The Commissioners were unanimous in reporting that, in many factories and workshops which they had visited, the sanitary conditions were very bad, the ventilation was improperly attended to, and little or no attempt had been made to guard the machinery. They were agreed as to the need of further legislation, but, while some were of opinion that the wider powers should be exercised by inspectors under the local authorities, others were in favour of the appointment of a special class of male and female inspectors. They also found that children of the ages of ten, eleven, and twelve years were employed in factories, and that the hours of labour in many retail shops were very long, adding that medical evidence was conclusive that the excessive hours were more injurious to health in Queensland than they would be in a colder climate; but they were unable to concur as to the advisability of legislative interference. A Factory Act, though not of a very stringent character, was passed by the Government towards the end of the session of 1896.

The attention of the Government during the last few years has been directed mainly towards the restoration of the credit of the country and the development of its industries. Queensland reached its lowest ebb in 1889, when, in spite of the recent loan of ten millions, the deficit amounted to £484,000. Since that time matters have rapidly improved, and in 1895 and 1896 the revenue was considerably in excess of the expenditure. This result has been achieved by economical administration, and the direct encouragement of enterprise which has been effected by a large extension of the sphere of State action. The principles involved appear to have been threefold.

First, that the State should facilitate the occupation of outlying districts by the construction of public works, provided they may be expected to return a fair interest upon the expenditure. The proposals put forward some fifteen years ago, that the three Western lines should be connected with the Gulf of Carpentaria by a series of Land Grant Railways, were condemned by the sense of the community, which preferred to postpone their construction until it could be undertaken by the State. In pursuance of this policy all the railways are owned and managed by the State, which has recently protected itself against the danger of the construction of unprofitable lines under political pressure by an Act of Parliament under which, upon any fresh proposal, the local authorities affected may be required to give a guarantee that they will, for a period of years, should the earnings fail to reach a certain standard, make good half of the deficiency out of the rates. In the Western portions of the Colony, in which occupation has been retarded by the scarcity of water, the Government have also incurred considerable expenditure in the successful provision of artesian water and in general works of conservation.

Secondly, that the State may assist producers to dispose advantageously of their produce. Reference has been made to the contracts which the Government have entered into with the British India Company for the carriage of farm and dairy produce. They are now considering the advisability of assisting cattle-owners, whose resources are severely strained by the low prices which they obtain in London for their frozen meat. The principal cause of the low prices and the attitude of the Premier can be gathered from the following extract from the financial statement which he delivered in 1896:—

"Our meat I believe to be as good as any in the world, and the cost at which it can be delivered at a profit at the ports of the Colony will compare favourably with any other country that I am aware of; and yet the prices lately obtainable in London are such as barely cover the charges for freezing, freight, insurance, &c. Something will have to be done if the industry is to be preserved. The only suggestion I have received as yet is that the Colony, either individually or in conjunction with the other Colonies, should take the business of distribution into its own hands, as it is believed that, whilst the consumers give good value for our meat, a great part of that value is absorbed by various graduations of middlemen, leaving, as I have said, a margin for the producer altogether disproportionate to the real value of the product. To effect this a large amount of capital will be required, respecting which I have no proposal to submit, as the matter is really one for private enterprise to undertake, but I mention the matter as one requiring speedy and most serious attention, because, if private enterprise should not be forthcoming to cope with the difficulty, it may devolve upon Parliament to adopt such measures as may appear practicable to conserve an important industry which we can ill afford to lose."

Subsequently, I understand (I was not in Queensland at the time), a Parliamentary Committee was instructed to consider the question, and reported in favour of the establishment at London and in the provinces of depôts for the receipt and distribution of frozen meat.

On another occasion, referring to the injury done to the harbour of Brisbane by excessive towage rates, the Premier said that if private enterprise could not do it for a less sum, it would be a very simple thing for the Government to take the matter in hand.

Thirdly, that the State may use its credit, after strict investigation of the circumstances and upon conviction of the validity of the security, to enable prospective producers to borrow money at a low rate of interest. The Sugar Works Guarantee Act, of which I have quoted the provisions, has led other producers to ask for similar concessions. The farmers want flour mills and cheap money; the pastoralists and graziers complain of the tax levied upon them under the Meat and Dairy Produce Encouragement Acts. Why, they ask, should the sugar industry be exceptionally favoured? Again, if the Government are to establish distributing agencies for frozen meat, why not also for other produce?

The Socialists describe these various measures as a spurious form of socialism calculated to increase the profits of a single class of the community; but the Government do not trouble themselves about abstract terms. They have steadily pursued a settled policy, and have successively assisted the sugar, pastoral, and agricultural interests; they are prepared, if necessary, to give substantial help to cattle-owners in the disposal of their produce, and they intend to propose amendments of the mining laws which will promote the further development of the industry. Nor have the producers alone been benefited; the working classes, who are the first to suffer in times of depression, are sharing in the renewed prosperity of the country, and have been able to take advantage of the increased demand for their services.

IV

THE LAND POLICY OF NEW ZEALAND

Differences of conditions between Australia and New Zealand—The Public Works policy—Taxation on land—The Land Act of 1892—The Land for Settlements Acts—The Government Advances to Settlers Acts—The encouragement of settlement—The co-operative construction of Public Works—The unemployed—Continuity of policy.

The Constitution of 1852, under which New Zealand obtained responsible government, differed from those granted to the Australian Provinces in the creation of Provincial as well as Central Authorities. Owing to the mountainous character of many parts of both islands, and in the absence of railways and other facilities for internal transit, communication had been carried on principally by sea, and settlement, instead of radiating from one point, as in New South Wales, Victoria, and South Australia, had been diffused at Auckland, Wellington, Christchurch, Dunedin, and other places of secondary importance. Under these circumstances, while it was deemed advisable to create a Central Government at Auckland, which was transferred to Wellington in 1865, six elective Provincial Councils were established, which, though their legislative and executive powers were confined within specified limits, promoted the continuance of the separate development of the several portions of the Colony. In 1876 the Provincial Legislatures, which had in the meanwhile been increased by a division of territories to ten, were abolished by the Central Government, principally because they impeded the execution of the national policy of the construction of public works. The effects of the system, however, are still seen, especially in the demands made in the House of Representatives that the different districts shall share in the benefits of any proposed expenditure of public funds.

Another feature which served to differentiate New Zealand from Australia was the existence of a warlike native race in the North Island, which opposed the colonisation of the early settlers. From the outset, ignorance of each other's language and habits of thought led to misunderstandings in regard to the disposal of land, which was complicated by the communal tenure of the Maoris. The appreciation of this difficulty led to the insertion in the Treaty of 1840, in which the chiefs purported to cede the sovereignty of New Zealand, of a provision which reserved to the Crown the right of pre-emption over all native lands. But the dissatisfaction was not allayed; the natives, conscious of the steady advances of the settlers and urged to sell by agents of the Crown, feared that they would gradually be dispossessed of their territory. A conflict which arose in regard to some land, and led to fatal results, increased the state of tension, which culminated, after a struggle in the extreme north, in the prolonged conflicts of 1860 to 1870. After the pacification the reciprocal relations began to improve, and are now excellent. The Maoris are universally respected, have four members in the House of Representatives, and two in the Legislative Council, and are represented in the Executive Council by a Minister, who is himself a half-caste. Numerous attempts have also been made to settle the land question, notably by the resumption of the right of pre-emption, which had been waived for a time, and by the constitution, by an Act of 1893, of a Validation Court for the purpose of considering and finally settling the titles to lands obtained by Europeans from the natives. In view of their pre-emptive right, the Government have been bound, in justice to the Maoris, to make provision for the purchase of such lands as may be offered to them, though they have not herein initiated a new policy. From the establishment of Imperial sovereignty to 1870, successive Governments acquired six million acres in the North Island, the whole of the Middle Island, with the exception of reserves for the original owners who were few in number, and Stewart Island. From that date until 1895, another six million acres had been acquired at an outlay of a million and a half pounds, and subsequent purchases, from a large area still under negotiation, amount to about 550,000 acres. New Zealand has thus disbursed, and is still disbursing, large sums of money in the purchase of native lands, while Australia and Tasmania recognised no right of possession on the part of the few degraded aboriginals; and New Zealand alone is burdened with the payment of interest upon loans raised to cover the charges of prolonged military campaigns.

During the wars, settlement was necessarily checked in the North Island, but proceeded in the Middle Island without intermission. At their conclusion, in 1870, Mr. (now Sir Julius) Vogel, the Colonial Treasurer, placed before Parliament a comprehensive scheme of public works, which aimed at the general improvement of means of communication, a matter of particular importance in the North Island as being likely to hasten its final pacification. "The leading features of the policy were: to raise a loan of ten millions, and to spend it over a course of years in systematic immigration, in the construction of a main trunk railway throughout the length of each island, in the employment of immigrants on the railway work, and in their ultimate settlement within large blocks of land reserved near the lines of railway, in the construction of main roads, in the purchase of native lands in the North Island, in the supply of water-power on the goldfields, and in the extension of the telegraph. The plan, with some modifications, was authorised by the Legislature. These modifications mostly related to the amount to be borrowed and to its expenditure; but there was one alteration which crippled the whole policy. The reservation of large tracts of Crown land through which the railways were intended to be made, with a view to the use of that land for settlement thereon, and as the means of recouping to the Colony a great part of the railway expenditure, was withdrawn by the Government from fear of losing the whole scheme. That fear was not unfounded, inasmuch as provincial opposition to the reservation in question, combined with the opposition of those who disliked the whole scheme, would have seriously endangered its existence."[5 - "The Colony of New Zealand," Gisborne, p. 170.] The provincial opposition was due to the fact that, though the disposal of the Crown lands and the appropriation of the Land Fund were vested by the Constitution Act in the Central Legislature, each province had in practice been allowed to frame the regulations for the alienation of land within its district, and had received the proceeds of sale for its own use. But the omission of the proposed reservation "has necessitated the frequent recurrence of borrowing large sums in order to continue work which had been begun and was useless while it was unfinished, instead of making, as would have been the case under a proper system of land reservation, the work itself to a great extent, if not altogether, self-supporting and self-extending; and that deplorable omission has also frustrated the anticipated conduct of progressive colonisation concurrently with the progress of the railways. The result of not insisting on this fundamental condition has been what should have been foreseen and obviated. The Provincial Governments sold land in the vicinity of the intended railways, and expended the proceeds for provincial purposes; and, as a rule, speculative capitalists absorbed the land and the profits which should have been devoted to colonisation and to the railway fund."[6 - "The Colony of New Zealand," Gisborne, pp. 171-2.] As the proposed railways would pass through private as well as Crown lands, Sir Julius Vogel also sought the power to levy a special rate, in certain circumstances, upon the persons in the vicinity of the railways who would be benefited by their construction. He believed that he would thereby prevent "indiscriminate scrambling for railways," but was equally unable to induce Parliament to accept his views. The aggregation of large estates was promoted by the low price, 10s. or even 5s. an acre, at which the land was for many years sold. 262 freeholders, including companies, owned in 1891, 7,840,000 acres of land in estates of 10,000 acres and upwards. The Province has, since its foundation, sold or finally disposed of more than 21 million acres, and has at present nearly three million acres open for selection. The remaining lands, exclusive of those in the hands of the Maoris, amount to 16-½ million acres, but comprise large tracts of barren mountainous country in the Middle Island, and of valueless pumice sand in the North Island. In most directions, according to the Premier, settlement is already in advance of the roading operations.

The policy initiated by Sir Julius Vogel in 1870 was carried on by successive Ministers until 1888, during which time more than 27 millions were borrowed and devoted, for the most part, to the construction of railways and other public undertakings. Subsequently, Sir Harry Atkinson and his successor, Mr. John Ballance, realised the danger of constant reliance upon loans, and greatly reduced the expenditure, which had become extravagant in the abundance of borrowed money. Mr. Ballance also reformed the system of direct taxation and gave an impetus to legislation dealing with the settlement of the land and the protection of workmen in industrial pursuits.

The existing property tax, at the rate of one penny in the £ on all property, subject to an exemption of £500, was replaced by a graduated tax on incomes and land values, the principle of graduation having already been recognised in the case of succession duty. The former impost was naturally upheld by large owners of property and by all classes of professional men who had escaped taxation upon their incomes; while it was distasteful to shopkeepers, who might be taxed on unsaleable merchandise, and to cultivators of the soil, who found that their taxes rose in proportion to the improvements which they effected upon their estates. The Government had little difficulty in passing their measure, which, subject to slight modifications, is in force at the present time. Incomes below £300 are not taxed; between £300 and £1,300 they pay 6d. in the £, above £1,300 a shilling; but the sum of £300 is deducted from the total income in the assessment of the tax. For instance, an income of £2,000 pays £60, at the rate of £25 upon £1,000, and £35 upon £700. The ordinary land-tax is a penny in the £ on all freehold properties of which the unimproved value exceeds £500; between £500 and £1,500 exemption is allowed on £500; between £1,500 and £2,500 the exemption decreases by £1 for every £2 of increased value, being extinguished at the latter amount. Should the value exceed £5,000, a graduated land-tax is also levied, which rises progressively from half a farthing, until it reaches twopence upon estates of the unimproved value of £210,000 and upwards. All improvements are excluded from the assessment of the taxable amount: they are defined to include "houses and buildings, fencing, planting, draining of land, clearing from timber, scrub or fern, laying down in grass or pasture, and any other improvement whatsoever, the benefit of which is unexhausted at the time of valuation." Under this provision rural owners have every encouragement to improve their properties, as the more they do so, the smaller becomes the proportion of the total value of their estates on which they are liable for taxation. Owners are allowed, for the purposes of the ordinary, but not of the graduated land-tax, to deduct from the unimproved value of their land the amount of registered mortgages secured upon it; and mortgagees pay one penny in the £ upon the sum total of their mortgages, but are not subject to the graduated tax. A return, published under the assessment of 1891, shows, however, that rural owners are obtaining less benefit from the exemption of improvements than the owners of urban lands. The figures are as follows:—

It thus appears that land is taxed, on an average, at 49 per cent. of its actual value inclusive of improvements in boroughs, and at 67-½ per cent. in counties; but it must be remembered that, as the urban population is not concentrated in one centre, land values have not been inflated to any great extent, and that much of the rural land has either recently been settled or is held in large blocks in a comparatively unimproved condition. The improvement or sale of such properties would, the Government believed, be promoted by the imposition of the tax. The Minister of Labour (the Hon. W. P. Reeves) expressed this view in the clearest terms: "The graduated tax is a finger of warning held up to remind them that the Colony does not want these large estates. I think that, whether partly or almost entirely unimproved, they are a social pest, an industrial obstacle, and a bar to progress." Similar feelings are, apparently, entertained towards the absentee owner, who, if he has been absent from or resident out of the Province for at least three years prior to the passing of the annual Act imposing the tax, is required to pay an additional 20 per cent. upon the amount of graduated land-tax to which he would otherwise be liable. The income and land taxes produce a revenue about equal to that formerly derived from the property tax, and are collected from far fewer taxpayers, the respective numbers being 15,808 and 26,327 in a population of some 700,000 persons. The benefits have been felt principally by tradesmen, miners, mechanics, labourers, and small farmers. Of 91,500 owners of land, 76,400 escape payment of the land-tax. It may be noted, incidentally, that a permissive Act of 1896 authorises such local bodies as adopt it to levy rates on the basis of the unimproved value of land. Much anxiety has been felt by large landowners and owners of urban property throughout Australasia at the successive adoption of a tax on unimproved values by South Australia, New Zealand, and New South Wales. They fear that it is the first step towards the national absorption of land values advocated by Henry George, but forget that the Governments of New South Wales and New Zealand, in respect of exemptions, and of New Zealand and South Australia, in respect of graduation, have introduced features in their systems of taxation which cause them to be fundamentally distinct from his proposals. The Bill passed through the Victorian Assembly in 1894, but rejected by the Council, also provided for exemptions.