higher duties was passed. This tariff was repealed by the free traders in 1887. From this time on there was in New South Wales a see-saw between approximate free trade and a low-customs duty with slight protectionist features, until federation removed the question from state politics.

New South Wales had favored free trade because Sydney drew great advantages from being the only large distributing center in Australia unhampered by tariff restrictions, and also because the people of that colony thought that, since water power is almost non-existent, their possession of the only important coal fields in the colonies would be more important than protective legislation in causing manufactures to locate within their territories. In the latter expectation they were disappointed; for Melbourne became the leading manufacturing city and for a time the financial center of Australia. The rela tively greater prosperity of Victoria, at least until the crisis of 1893, was probably the principal reason for the slow rise of a mild protectionist party in New South Wales.

Meantime these diverse fiscal policies, which also appeared, tho in a less marked degree, in the other colonies, were an added obstacle to an intercolonial customs union, such as Great Britain had early tried to establish. The constitutions granted to the different colonies by the mother country permitted them to impose any duties they saw fit, provided they were not differential, even upon imports from England itself. At various times, conferences were held by representatives of the colonies in Australia to further intercolonial trade agreements. In 1871 such a conference tried vainly to form a customs union, and desired the home government to sanction reciprocity conventions to help intercolonial trade. Two years later another conference was held for the same purpose, which

made the same recommendation. Thereupon the British Parliament, upon motion of the Gladstone ministry, passed, in 1873, the Australian Colonial Duties Act, permitting differential duties among the colonies, but excluding Great Britain from such arrangements. However, the colonies did not avail themselves of this privilege, partly because different tariff policies, railway competition, and commercial rivalry made an agreement including New South Wales and Victoria impossible. In the eighties other conventions were held with the hope of forming a customs union; but the opposition of Victoria to intrusting to a commission authority to make a tariff, recognizing fairly the interests and special circumstances of each colony," again defeated this project.

Very slowly, therefore, as intercommunication was perfected and intercourse among the colonies became more common, did the people recede from their policy of mutual trade isolation. Finally, with the growth of a spirit of nationality among all Australians, the sentiment in favor of federation made possible a general solution of the intercolonial tariff question with the other problems of union.

But this solution was not arrived at without much tribulation. Tariff discussions were acute in the federal convention, and the tariff provisions finally adopted threatened for a time to prevent the adoption of the constitution by some of the colonies. The tariff powers of the central government have been temporarily limited by compromises adopted to conciliate the interests of particular states.

The first constitutional convention, in 1891, submitted provisions for a federal tariff, that formed the basis of discussion in the second convention six years later. There was general agreement on the main issue,-intercolonial

free trade. In its relation to revenue this subject fell under three heads,-tariff, excise, and bounties. The drafters of the second constitution (1897), without discussion, provided that the central government should have exclusive authority to levy uniform import duties and excise taxes. Some members of the convention wished to have the states retain the right to continue a policy, already successfully adopted, of promoting local industries by export bounties; but the general sense of the delegates was that this might cause discriminations not unlike those which it was sought to abolish with the intercolonial tariffs. Subject to unimportant qualifications, therefore, the federal government was given control of bounties also.

Three of the five colonies represented in the convention of 1897 had protective tariffs. Of this group Victoria was the leading representative. Two years before New South Wales had changed from a protective to a free-trade policy. Western Australia was in an abnormal position, on account of the recent gold discoveries, without as yet a settled policy adopted to conform with its new conditions. Queensland was not represented. The diversity of policy in the different colonies, especially in the two leading colonies of Victoria and New South Wales, and the financial condition of the smaller colonies, South Australia and Tasmania, created a very delicate problem for the convention to solve. This related to the distribution · to the states of customs revenues collected by the federal government. It had been agreed that, until a uniform tariff was enacted,-which was to occur within two years of federation,-federal officials should collect the customs imposed by the states, and that these customs should apply to interstate as well as to foreign imports. Therefore, the administration of the customs revenues became at once a federal function. Both before and after a uni

form tariff was adopted, the Commonwealth was to turn over to the states the surplus revenue from duties not used for federal purposes. The proportion in which this revenue was to be distributed to the different states was a point at issue between a free-trade colony like New South Wales and the protectionist colonies; but this question related to finance rather than to the tariff as a separate subject. However, the smaller colonies, who had large interest charges to meet from local revenue, and already levied heavier direct taxes than their larger neighbors, were much concerned in the second point in controversy,the proportion of the total customs revenue that should be returned to the states by the federal treasurer. Upon motion of Sir Edward Braddon, of Tasmania, the proportion of the customs revenue that might be used by the Commonwealth for federal purposes was finally limited to one-fourth the net amount collected. This guaranteed three-fourths of the revenue for state use. was that the Commonwealth, in order to provide for its own expenditures, must raise at least four times their estimated amount by a tariff. This meant either a very high-revenue tariff or a protective tariff, and was considered a defeat for free trade. This clause of the constitution, known in the campaign for its adoption as “Braddon's blot," caused the defeat of federation in the first election in New South Wales.

But the result

Meantime it was recognized that Western Australia occupied a peculiar position. It was separated from the other states by four or five days' sea travel; for even to-day there is no overland communication. The recent gold discoveries were bringing in a large number of immigrants, new inland cities were springing up, and there was a great demand for public expenditure upon railways and public works. The revenues were obtained chiefly from customs duties, and this was at the time almost the only ade

quate source of supply available. But the imports were chiefly from the eastern colonies of Australia. This was particularly true of provisions,—a very large item, as the mines were absorbing all local labor,-and to no small extent it was also true of general merchandise, which was reshipped to the colony from Victoria. To cut off the revenue from these imports might bankrupt Western Australia, and certainly would seriously cripple its finance. Therefore, after much discussion, a provision was inserted in the constitution, providing that this state might retain its existing tariff upon imports from other states for five years, reducing it one-fifth annually. At the end of five years complete interstate free trade was to take effect. The state tariff, as well as the Commonwealth tariff on imports from foreign countries and Great Britain, was to be collected by federal officials. If during the five-year interval the federal duty upon any foreign article should be lower than the state duty, the higher rate was to be collected upon the importation of that article into Western Australia.

The administration of federal customs is regulated by the Customs Act of 1901, which provides that there shall be a minister of customs, a comptroller in actual charge of the administration, and a collector with subordinate officers in each state. There are the usual provisions for bonded warehouses, for a drawback on articles re-exported, except liquors, tobacco, and opium, and for the reference of disputed classifications and valuations to the minister. The government has the right to purchase any goods which are imported subject to an ad valorem duty, for 10 per cent. above their declared valuation. Where there is doubt as to the classification of an article, the higher duty is the legal one.

When a state prohibits the importation of any article, the federal customs officers enforce that prohibition "as