per cent. should be retained against Great Britain and an additional duty of 5 per cent. levied on cottons from other countries. Woollen piece goods are classified under more headings than in the previous tariff. Those weighing not over five ounces per square yard (women's dress goods) are admitted at a lower rate; but the duty on worsteds and tweeds and such heavier suitings as are manufactured in Australia has been increased even against the mother country. There was room for a difference of opinion, even among the tariff experts of parliament, as to the real effect of the preferential clauses. The most effective preference seems to have been given upon those articles which Australia already imports chiefly from Great Britain. In the original bill the average preference, upon preferred items, was estimated to be 234 per cent. of the higher duty; and this ratio was increased to about 25 per cent. by Parliament. It is maintained by the government that British exporters will pay, upon a basis of their shipments to Australia in 1906, about three-quarters of a million sterling less in duties annually than if they were required to pay the full tariff.

So far as trade with the United States is concerned, the new tariff is not so unfavorable as these general statements might imply. Our trade with the Commonwealth has been growing rapidly. The Australian valuation of imports from this country rose from $12,000,000 in 1891 to $28,000,000 in 1901 and over $31,000,000 in 1903. Australia takes more goods from us than from any other country except Great Britain, and nearly three times as much as from Germany, the country next to our own in rank. On the other hand, both Germany and France buy more produce from Australia than does the United States. They take wool to the value of nearly $8,000,000 annually from the Commonwealth, or twice as much as we import. For their American goods the Australians

pay chiefly in specie or bullion, nearly $8,000,000 of the $15,000,000 we receive annually from them being in that commodity.

In spite of these trade relations with European countries, the tariff recently imposed is relatively easier on our trade than on that of Germany and France, principally because those countries compete more directly than we do with Great Britain in the goods they send to the Commonwealth. For instance, our largest export to Australia is wheat, which we send to the value of over $5,000,000. Next in value is timber, of which we send over $2,500,000 worth. Tobacco to nearly the same value, and somewhat less petroleum, are other products in which we meet practically no competition from England. We have a large market for machinery in Australia, and our harvester trust, as well as our tobacco trust, has been legislated against pretty directly. But mining machinery is bought freely in America, and many of our specialties, such as typewriters, phonographs, sewing-machines, tools, and machine tools, are either free of duty or admitted at merely nominal rates.

Coghlan estimates that the proportion of total Australian imports received from the mother country has fallen from one-third to one-fourth within a decade, and that this was largely due to the use of foreign manufactures. The new tariff may check this tendency. But, even if it has little economic influence, it indicates a sentiment in favor of recognizing imperial obligations, and that sentiment itself is an important protection for British commercial interests in Australasia. I was once walking over the government wharves at Wellington with one of the superintendents. He pointed to a warehouse containing a quantity of iron or steel rods or pipes, saying, "We used to get a good deal of that stuff from Germany, but we've been buying it of you Yankees since the Boer War."

The influence of a uniform tariff upon Australian manufactures has been beneficial, tho the two parties in Parliament cannot agree whether this is due to intercolonial free trade or extra-colonial protection. Victoria was an old seat of manufactures, and has drawn much advantage from her superior preparation in securing the market for her goods in other states of the Commonwealth. Nevertheless, there has been something of a manufacturing boom in all of the other colonies, with the possible exception of Tasmania. In 1904 I found new factories and factory extensions almost equally common in Brisbane, Sydney, Melbourne, and Adelaide, and even in Western Australia they had begun to manufacture shoes. The Victorians, using American shoe machinery (not infrequently under the superintendence of American or American-trained foremen) have built up a large local trade, and have well-equipped factories, with considerable specialization of production. This is the line of manufacture best established in the Commonwealth, and some 4,000,000 pairs of shoes are made annually.

Woollen mills were started many years ago to provide coarser fabrics from native wool. The ups and downs of this industry remind one of the history of the same manufacture in America. Its variations in Victoria, independent of the amount of protection it received, are often quoted by free traders. For instance, the number of employees and the rate of protection were as follows the years mentioned:

Clothing and shirt factories are numerous, and some of the establishments are large. Apparel has been protected in most of the colonies, but the industry has been specially prosperous since federation. Certain kinds of agricultural machinery are manufactured on a fairly extensive scale, and one Victorian manufacturer ships a combined harvester and stripper of his own invention, in train-load lots, to Algiers, the Argentine, and other countries.

The growing value of Australian manufactures is roughly indicated by the following table, which shows the respective importations of domestic and foreign manufactured articles of three classes, for the five continental states of the Commonwealth, for two years. These figures do not include the value of goods manufactured in each state that are consumed in the same state, and therefore are not to be confounded with total value of domestic manufactures, which would be much larger.

STATE IMPORTATIONS FROM FOREIGN COUNTRIES AND FROM OTHER STATES.

Therefore, in each instance there was a larger proportionate increase in the interchange of domestic than of foreign manufactures, and the value of Australian-made machinery crossing state borders increased well toward $400,000 during a year when the trade in imported machinery declined more than that amount.

From 1899 to 1904 the value of domestic manufactures

shipped from Victoria to other states increased by the following amounts, in round figures, for the articles mentioned: apparel, $1,300,000; boots and shoes, $1,300,000; machinery, $375,000; flannels, $225,000; and other woollens, $80,000. These figures, as well as the preceding, appear small in comparison with the statistics of manufactures and interstate commerce in America, but they are for a population of 4,000,000, or about one-twentieth that of the United States. They show that conditions attending and following federation have been favorable to Australian manufacturers. These are not due entirely to good seasons, for in the interim the country has been afflicted with one of the severest droughts in its history. But they are probably due in a greater degree to the broader market afforded under interstate free trade than to the fiscal policy affecting foreign imports.

The federal tariff has been put into operation without the serious controversies respecting the nature of the constitution and the rights of the states that in our own country followed the adoption of a protective policy. This is partly because such issues are now better understood and have been more explicitly provided against in the organic law, and partly because the whole Commonwealth is a dependency of the empire, subject in the last recourse to her control. Nevertheless, the horizon in Australia has not been entirely free from clouds. The right of the federal government to levy duties on goods imported by the state governments has been contested, and never settled. Thus the states have been made to pay heavily upon the railway materials they have imported, and this has been a cause of complaint by the state commissioners. New South Wales secured a decision in the Supreme Court of the state that such duties were unconstitutional, but the federal government disregarded the decision. A High Court is provided for in the