for the little part that I have played, or the part of our immediate friends, I want to say that we are grateful to be a part of it. To the great public and this council, who have helped in this work, on behalf of the council, I say that we are proud of being a part of it. But the real credit is due neither to the administration nor to the council: it is due to the right-minded people of this community, and that at last is the measure of all the good that can come to any community.

I am glad to take a humble part in it, and I would rather, my friends, leave to those little grandchildren of mine the feeling that this community, which has trusted me, will never have occasion to regret it, than to leave to them any other heritage on earth.

E. W. BEMIS.

CITY WATER DEPARTMENT,
CLEVELAND, OHIO.

AUSTRALIAN ECONOMIC PROBLEMS: II. THE

TARIFF.

SUMMARY.

Colonial tariffs, 576.-Early protection, 577.-New South Wales and Victoria, 578-580.-The tariff and the Federal Constitution, 582.-Compromise with Western Australia, 583.-Administration of customs, 584.-The First Federal Tariff of 1901, 586.-Protection to labor, 587.—The "New Protection," 588.-The Second Federal Tariff of 1907, 592.-Preference to Great Britain, 593.—Manufactures extend, 597.-Questions as to states' rights, 599.-Protection likely to continue, 601.

THE principal motive for forming a federation in Australia, as in America, was to secure free trade among the states. In each case the act of union was accompanied and followed by tariff controversies that caused a rearrangement of both political parties and business conditions. But Australians have brought to bear upon this issue opinions matured by a century of discussion in other countries and of experience at home. At the same time, however, they have had to consider protection and free trade in relation to laws and political exigencies peculiar to the Commonwealth, for which they could find no precedents in other lands.

From as early as 1799 Australian governors levied import duties upon such luxuries as rum and tobacco. These taxes were for revenue only, and had been in force some twenty years before they were legalized by an act of the British Parliament. In 1842, before representative government was established in Australia, the New South Wales authorities tried to legalize by ordinance a custom,

existing without statutory warrant, of allowing free entry to goods from Tasmania in return for a like favor from that colony, and extending this reciprocal free trade to New Zealand. The imperial government disallowed the act, and forbade any colony to give preferential treatment in its tariff arrangements to another colony. From this date until the federal tariff was enacted, nearly sixty years later, each colony levied duties upon imports from other colonies, as well as from the mother country.

Tho the British government would not allow a colony to give tariff preference to one of its neighbors as against another, it favored a uniform tariff for Australia, with intercolonial free trade. In 1847 the Colonial Office at London, and two years later the Committee of Parliament on Trade and Plantations, recommended that a central legislative authority be established in Australia to enact such a tariff. The committee reported that, if each colony were permitted to impose duties according to its own wants, the obstruction to trade and check to development would be so great as to render it necessary "that there be one tariff common to them all, so that goods may be carried from one into the other with the same absolute freedom as between adjacent counties in England."

But the colonies were not yet ready to submit their revenue policies and financial fate to a central government, and their opposition defeated the project. They were averse to a uniform tariff, not because of differences as to protection and free trade, but because each colony wanted to control its customs for purposes of local reve

nue.

At this time a nominally free-trade party was in undisputed control throughout Australia. The grazing interests, then dominant and always important, favored a low tariff. They marketed their wool largely in Great Britain,

where it was exchanged for British manufactures. They wished to buy these manufactures as cheaply as possible, and they did not want local industries established that would increase settlement, and by creating a demand for government land possibly deprive them of their leaseholds. But they did not want absolute free trade, because then local revenues might have to be raised by a land tax, which would fall directly on them. The traders and bankers of the cities had the same tariff views as the graziers, whose wool they handle, whose transactions they finance, and whom they supply with merchandise. Thus the business men of Australia at this time, tho they called themselves free traders, were really in favor of a low revenue tariff, imposed chiefly upon luxuries.

This was the established policy, responding to the economic needs of the country, and intrenched by fifty years of precedent, when gold was discovered in Victoria. There was nothing in the mere discovery of gold and the rush of adventurers from all parts of the world to the gold fields to change the economic motive for a low tariff. The prospector and digger, like the squatter, wanted cheap supplies; and his gold, like the latter's wool, had the more value the more readily it could be exchanged with England. But within a decade a combination of influences, due to the gold discoveries, made Victoria a high-tariff colony. The authorities had imposed license fees for mining on crown land and an export duty on gold. The licenses caused an armed revolt at Ballarat, and the export tax made the gold-field representatives in the local parliament favor higher import duties, in order that the export duty on gold might be removed without diminishing the revenues. Both the license and the export tax were grievances that made the miners hostile to the pastoralist government then in power and to all its policies. At the same time a surplus of labor, following in the wake

of the gold-seekers, accumulated in Melbourne and a few other of the larger towns, establishing artisan communities and incipient manufactures. These people were protectionists, and allied in general sympathies with the miners against what was considered a land-holding aristocracy. After the first richness of the gold fields was exhausted, many miners drifted back into the cities, increasing the class of unemployed that sought relief through the establishment of new industries.

The struggle between the protectionists and the free traders, or revenue tariff party, caused a political crisis in Victoria, and ultimately brought about the resignation not only of the cabinet, but also of the royal governor. The lower house of parliament tacked clauses increasing the tariff on the appropriation bill, which the upper house refused to pass. As a result, no appropriations were made, and the government was left without money. A new election in 1865, attended with violent campaigning and rioting, resulted in a victory for the protectionists. A higher tariff was passed, which was considerably increased in 1877 and afterwards, reaching a maximum in 1892. Four years later some reductions were made, and soon afterwards the colonial tariff was superseded by a federal customs act.

While Victoria was pursuing her protectionist policy, her great rival, New South Wales, was favorable to free trade. In 1864, when the fiscal crisis was occurring in Victoria, the ministry in New South Wales was defeated in an attempt to increase the customs duties in order to meet a deficit of nearly $2,000,000 in the revenues. However, upon an appeal to the country a parliament was elected that passed a tariff act, levying 5 per cent. ad valorem on imports. In 1873, during a period of prosperity, this tariff was repealed. Ten years later a protectionist party had also grown up in this colony, and an act imposing