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The Pamphlet Collection of Sir Robert Stout: Volume 24

A Review Of Mr. For Steer's Paper, Fallacies of Federation

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Australian Federation.

John Sands, Printer George Street, Sydney

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Australian Federation.*

Amongst the many reactions of public feeling in the old country during the last quarter of a century, there is perhaps none more remarkable or complete, than the change of opinion which has taken place with reference to the colonial policy of the Empire. Until within the last few years, any public man who advocated the importance of keeping up the connection between the colonies and the mother country, was considered by advanced thinkers to hold respectable but old fashioned and obsolete ideas. The view then most in favor was that a Colonial Empire added nothing to the strength of the United Kingdom, that it involved needless expense, and increased the liability to war. Now, however, the vane points in the opposite direction. Everybody is for holding on to the colonies we have got, and not a few are in favor of acquiring more. Concurrently with the growth of these retentive and acquisitive feelings, an aggregative tendency developed itself; and the advantage of separate but neighbouring colonies coalescing in groups under a federal system, became a fashionable and favourite topic. From this idea political theorists not unnaturally advanced by few and simple steps to the consideration of a federal union of the colonies and the mother country, and of a still nobler union of the whole English-speaking race; whilst poetic fancy soared as high as "the Parliament of man—the Federation of the World." So far, however, the practical result of the aggregative tendency has been limited to the actual federation of the North American colonies in 1867, and of the Leeward Islands group in the West Indies in 1871; whilst proposals were made in 1876 for the federation of the Windward Islands, and for the formation of a South African dominion. In Australia the subject attracted some attention many

* The Fallacies of Federation: A paper read before the Colonial Institute in London, by William Forster, Esq., Agent-General for the colony of New South Wales.

page 4 years ago, but the circumstances of that time were not favorable to federation. The colonies were then each intent on their own development—their interests did not interlace to the extent they do at present—and so the seed fell on stony ground, and for want of moisture withered away.

Lately, however, the discussions and transactions which have taken place in Canada, the Cape, and the West Indies, have helped to revive an interest in the subject in Australia. About six months ago an article on "Australian Federation" was published in Fraser's Magazine, and almost simultaneously a speech was delivered by the present Governor of New South Wales, Sir Hercules Robinson, at Albury, in which his Excellency discussed the advantages of a federal union of the Australian colonies as the only effectual and permanent cure for the evils to which the colonists, especially those residing on the borders, were exposed. The attention of thinking men was thus again drawn to the subject. Federation was freely discussed in the colonial newspapers, and was then taken up by the English Press—the Times leading the way with an able article warmly advocating the proposal. Just at this time Mr. William Forster, the Agent-General for New South Wales in London, entered the lists, and in a lengthy paper, entitled "The Fallacies of Federation," which he read before the Colonial Institute, challenged the opinions expressed by the writer in Fraser, and by Sir Hercules Robinson at Albury, and explained his own reasons for thinking that the policy of intercolonial federation was opposed to both Imperial and Colonial interests. To those who have the pleasure of being acquainted with Mr. Forster such a proceeding has caused no surprise. He bears the character of being a fearless and honest, but at the same time somewhat crotchetty and impracticable politician. The bent of his mind is essentially critical. He enjoys disputation as an intellectual exercise, and delights, like a skilful whist-player, in "leading up to the weak and through the strong." In political life he is the personification of the amusing character in the play—"the man who would not have it so;" and he usually performs the by no means useless, but often thankless function, of showing how much can be urged against any and every proposal which may for the time page 5 being be favoured by a preponderance of popular support. With such a temperament it was natural that he should seek to stem the current which has apparently set in in favour of Australian federation, and it cannot but be encouraging to those who believe in that principle that so skilful a controversialist could not make out a stronger adverse case. Mr. Forster's paper, though doubtless clever, is far from being exhaustive. It is true that as an enumeration of the associated nationalities of history, it is tolerably complete, but, considered as a disquisition on the advantages and disadvantages of intercolonial federation in Australia, it is both meagre and misleading. It no doubt provoked a long and animated discussion at the Institute, and has been the theme of several newspaper articles; but this is perhaps due in a great measure to the factitious weight lent to Mr. Forster's remarks by his position as quasi-representative in London of the colony of New South Wales. In this paper it is proposed to examine Mr. Forster's arguments, and, having demonstrated their unsoundness, to consider more fully than he has done the precise bearing of the changes which Australian federation would involve, and the advantages which might be expected to arise from them.

Mr. Forster, in the first place, distinguishes between Imperial and intercolonial federation—that is, between a federal union of the colonies with the mother country, and the federation of a group or groups of conterminous colonies. To Imperial federation he is not opposed, when the proper time arrives for such a partnership—when, in short, the growth and importance of the colonies- may render it convenient, if not imperative to give them a voice and influence in Imperial affairs. Intercolonial federation, on the other hand, he conceives to be not an Imperial, but, in every sense of the word, a colonial or local question, which the colonies should be left to settle for themselves without "the uncalled-for interference of the Imperial Government." If amongst any set of colonies a desire for federation should spontaneously arise, they should of course be free to carry out their wish, but it is not, in his opinion, the duty of the British Government to suggest or encourage the policy of page 6 colonial federation, a policy which appears to him opposed to Imperial and colonial interests for the following reasons:—
1."That it would probably afford facilities for Imperial taxation, or, in other words, for obtaining contributions from colonial revenues towards general purposes," such as "the expenses of war, or expenditure for the apparent benefit or regulation of commerce."
2.That colonial federation would be the prelude, not to Imperial federation, but to Imperial dismemberment: in other words, that it would be in its spirit antagonistic to Imperial unity, and would more or less tend to the disintegration of the Empire.
3.That at present every colony has its own interests in its own keeping, but that under a colonial federation local interests affecting, or supposed to affect, general interests, would be determined by the majority of votes. "The weakest would then go to the wall, and the interests and feelings of remote or insignificant portions of the federation would be sacrificed to those of the dominant majority, real or apparent,"
4.That colonial federation can effect nothing that is not attainable by the respective colonies in their present condition, as all the benefits proposed to be conferred upon groups of colonies by federation could be attained by each colony "with its present administrative machinery, by means of arrangement or negotiation with its neighbours, as has already been done by some of the Australian colonies in the cases of postal rates and subsidies and border customs."

This appears to be a fair and complete précis of Mr. Forster's paper, omitting merely his review of the national federations which have existed throughout the world from the time of the Achaean League to the present day, as that subject, however interesting to the student of history, has but little practical bearing upon the question of the relative advantages and disadvantages of intercolonial federation.

The doctrine laid down by Mr. Forster, that intercolonial federation is a local question which the colonies concerned should be left to settle for themselves by their own spontaneous action, is doubtless a correct one; and as the Imperial Government does not appear to have any intention of interfering in the matter in any "uncalled for manner," it is unnecessary to combat such an imaginary danger. Let us, therefore, without further preface, discuss the page 7 question of intercolonial federation on its merits, and with reference to the objections urged against it by Mr. Forster, in the order in which they have been for convenience arranged.

Mr. Forster's first and second objections, namely, that colonial federation would facilitate the taxation of the colonics for Imperial purposes, and would tend to the disintegration of the Empire, seem to refute each other. As a matter of abstract justice, there can be no doubt that British subjects residing in Australia are as much bound as British subjects residing in Yorkshire to contribute, in proportion to their number and means, towards the expenditure necessary for the maintenance of the Empire at large—towards such common charges, for example, as the army, navy, diplomacy, and the interest of the national debt. The Colonial Taxation Act, however, passed by Parliament in 1778, recognized the broad principle that for the future representation must accompany taxation, and since then British subjects in the colonics have not been required to contribute their quota to the general charges of the Empire. Before such a contribution can again be asked for, Imperial federation must in some form or other be conceded, so that representatives from the colonies may make a part of that "common consent in Parliament" without which, by the fundamental laws of the realm, no subject "can be compelled to contribute to any tax, tallage, aid, or other like charge."* It is no doubt true, as Mr. Forster urges, that it would be easier for the Imperial Government to negotiate with a federal group of colonies for their fair share towards the Imperial expenditure than with each colony separately; and the same facility would doubtless extend to all negotiations between the Imperial and colonial federal authorities, including negotiations for the establishment of colonial representation in the Imperial Parliament. But, as has already been shown, these increased facilities for taxation could not be availed of until that Imperial confederation, of which Mr. Forster is himself a strenuous advocate, were first conceded in some form or another, and all probability of disintegration thereby eliminated.

* Petition of Right.

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The third objection urged by Mr. Forster is, that under a colonial federation local questions affecting general interests would be determined by' the majority of votes, in lieu of the present arrangement, under which each colony has its own interests in its own keeping. And here, before proceeding further, it will be convenient to define precisely what intercolonial federation means. It means simply joint action in matters of common concern. It means agreement amongst a group of conterminous colonies that questions of common interest shall be surrendered by each to be dealt with by a common Administration and Legislature, in which each colony would be represented according to its numbers and importance. Purely local matters in each colony would remain, as before, exclusively under the jurisdiction of the colonial Legislatures. The settlement of what questions should be local or colonial, and what federal, would be a matter for arrangement during the establishment of federation; but the broad principle would be recognized that each colony would surrender to the federal Legislature the management of questions which, extending beyond the limit of its own jurisdiction, could not be dealt with in their entirety by that colony. If a question, then, affects the interests of several colonies—if it is to them a matter of common concern—how can it be more fairly decided than by a majority of votes within the area interested? Is not this the principle which governs all associations of interests, whether great or small? Why should not federal questions be settled by a federal majority in the same way as colonial questions are settled by a colonial majority, and in the same way as county, parochial, or municipal questions are settled by the wishes of the majority in each shire, parish, or borough? No doubt, under such a system, as Mr. Forster remarks, "the weakest would go to the wall, and the interests of insignificant portions might sometimes be sacrificed to those of the dominant majority," But if the principle of riding by majorities be not conceded, it will be impossible to advance beyond the autonomy of individual holdings. If it be conceded, why draw the line at the area of a colony instead of at that of a federation of colonies ?

Mr. Forster's remaining objection is that colonial federation page 9 would not be worth the amount of trouble and expense involved in the change, seeing that it could accomplish nothing which is not already attainable by the administrative machinery now existing in each colony. He refers to the benefits enumerated by a writer in Fraser's Magazine as likely to accrue to the Australian colonies from the establishment of federation, under the heads of (1) Railways; (2) Waste Lands; (3) Immigration; (4) Customs; and (5) Defences; and he urges that all these are strictly local questions, which each colony might settle for itself by negotiation with its neighbours, as has already been done by some of the colonies in the eases of postal subsidies and border customs.

Two more unfortunate examples could scarcely have been selected. The attempt to settle, by conference, our ocean mail services in the manner most beneficial to the whole continent has resulted in the southern, eastern, and northern colonies each subsidising separate sevices almost in opposition to, or, at all events, without attempt at concert with each other. The convention, too, made between New South Wales and Victoria, with a view of avoiding the actual collection of Customs' duties on the Murray has broken down, and the Customs' collections are again in full operation along the boundary between the two colonies.

With reference to Mr. Forster's observations as to the inability of a Federal Government to deal better with the questions of waste lands and immigration than they can be dealt with at present by the several colonial Governments, it may be remarked that taking the British North American Act of 1867, and the proposed South African Federation Bill of 1876 as precedents, the sale and management of the public lands in each colony would remain under the exclusive control of the colonial Legislatures: and that in each colony the colonial Legislature would have concurrent powers of legislation with the Federal Legislature in relation to immigration into the province. These two objections are, therefore, without weight. As to his observations upon a uniform Customs' tariff, it is only necessary to point out that agreement upon the general principles of such taxation must precede and not follow federation. All the colonies interested must first agree either upon a protective page 10 system, as in America, of internal free trade with taxation upon imports from without, or upon a free trade system as in the United Kingdon, under which specific import duties would be levied upon articles of general consumption, with corresponding excises upon the same articles when locally produced—the one system taxing trade, the other consumption. Until, therefore, Victoria is converted to a free trade policy, or can convert her neighbours to one of protection, there can be no federal union between them. This is a vital question which must be agreed upon in advance, and could not, as Mr. Forster appears to imagine, be left to be fought out afterwards. Defence, under a colonial federation, would be under the control of the Federal Government, and the cost would be defrayed from the federal exchequer. It is quite possible, as urged by Mr. Forster, that the expenditure upon local points of defence, and upon volunteer o militia enrolments, would in effect continue to be distributed under a federal system very much as it is at present. But there would be this great difference, that under the administration of one head one general scheme of defence would be framed, the several parts of which would be capable of dovetailing into each other: and under such a system, with the control of the intercolonial railways, the central authority would be able, at the shortest, possible notice, to concentrate the whole fighting force of the country upon any threatened point; while under existing circumstances there would be but a slender prospect of persuading the several colonies in a moment of excitement and danger to agree upon any combined course of action. With regard to railways, Mr. Forster seems to doubt whether federation would direct railway extension with greater certainty than at present towards national purposes or interests; but his admissions apparently prove the case against himself. He acknowledges that it is for the interests of the country at large that the great centres of population—such as Sydney and Melbourne—should be connected by railway. He believes that federation would hasten such a result. He admits that local jealousies and considerations of supposed local interests have so far prevailed in New South Wales to the injury of general interests in this matter; but he urges in extenuation that the railway policy of the colony has hitherto been page 11 to extend railways with equal rapidity (or slowness) north; and south and east from Sydney, rather than to open up intercolonial communication—that this policy was settled by the balance of rotes in the colony under a system of universal suffrage, and that it yet remains to be proved whether such a policy is wrong looked at from a New South Wales point of view. He acknowledges that under federation intercolonial railway extension would probably be hastened, but he asks whether any one is prepared to assert positively that other interests might not lie sacrificed in consequence. But this is simply a further plea for the retention of power by an obstructive minority. If a railway were purely a local undertaking, for the development of a portion of a colony, and had no connection with any line outside the limits of such colony, it would be a work which it would be competent for the Colonial Government to deal with as it might think proper. But if it is the interest of several colonies, and the wish of the majority in such colonies, that intercolonial railway communication should be opened up between them, is it right or reasonable that it should be in the power of any one colony to prevent or delay the carrying of such a policy into effect ?

We have thus considered the seven subjects quoted by Mr. Forster as examples of local questions which could be determined by each colony for itself by means of negotiation with its neighbours, as effectually as they could be dealt with by a Federal Government. It has been shown that in the case of two—postal subsidies, and border Customs—the attempt has been made to deal with them by negotiation, and the result has been a signal failure. It has been shown that the questions of waste lands, immigration, and Customs, have but little bearing on the point at issue. As regards Australian defence, there can be no two opinions that the military and naval authority would be more efficient if lodged in one executive power, instead of in four or five; and as to intercolonial railway extension, Mr. Forster himself admits that it is desirable—that it has been delayed by local jealousies and local interests, and would probably be hastened by federation.

Having thus disposed of Mr. Forster's fallacies, it will now be convenient to take a more precise and comprehensive view than he page 12 has attempted, of the subjects which would, in the event of a federation of these colonies, be in all probability transferred to the Federal Parliament from the Colonial Legislatures, and the reasons which exist for thinking that such questions would in consequence be more efficiently dealt with. Looking to the Colonial federations which have been accompli shed, as well as to those which have been proposed in different parts of the Empire, it seems probable that in the event of two or more colonies forming an Australian Dominion, it would, here as elsewhere, be found convenient that the following subjects should be placed under the Legislative authority of the Federal Parliament:—
1.The Public Debt, and the borrowing of money on the Public Credit.
2.Customs and other Federal Taxation.
3.The Regulation of Trade and Commerce.
4.Postal and Telegraphic Services.
5.The Census and Statistics.
6.Militia, Military and Naval Service, and Defences.
7.Navigation and Shipping, Beacons, Buoys, and Lighthouses.
9.Currency and Coinage, Legal Tender, Banking, Incorporation of Banks, and the Issue of Paper Money.
10.Bankruptcy and Insolvency.
11.Weights and Measures.
12.Patents of Invention and Discovery.
14.Naturalization and Aliens.
15.Marriage and Divorce.
16.The Criminal Law, except the constitution of Courts of Criminal Jurisdiction, but including the Procedure in Criminal Matters.
17.Immigration (concurrent with colonial Legislatures).
18.Public Works and undertakings of the following classes :—
a.Lines of steam and other ships, railways, telegraphs, canals, and other works and undertakings cennecting one colony with any other or others of the colonies, or extending beyond the limits of one colony.
b.Lines of steamships and telegraph cables between any part of the Federal Union and any British or foreign country.
c.Such works as, although wholly situated within one colony, are declared by the Federal Parliament to be for the general advantage of the Union, or for the advantage of two or more of the colonies.
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The subjects which would probably then remain under the exclusive authority of the colonial Legislatures, may be enumerated as follows:—
1.The Borrowing of Money on the sole credit of the colony.
2.Direct taxation within the colony, in order to the raising of a revenue for Colonial purposes.
3.The Management and Sale of Public lands.
4.Public Prisons.
5.Hospitals, Asylums, Charities, and Eleemosynary institutions.
6.Municipal institutions.
7.Shop, saloon, tavern, auctioneer, and other licenses, in order to the raising of a revenue for colonial, local, or municipal purposes.
8.Local works and undertakings, other than those specified under Federal subjects.
9.The Incorporation of Companies with colonial objects.
10.The Solemnization of Marriage in the colony.
11.Property and civil rights in the colony.
12.The Administration of Justice in the colony, including the constitution, maintenance, and organization of Colonial Courts, both of Civil and Criminal Jurisdiction, and including procedure in civil matters in those Courts.
13.The imposition of punishment by fine, penalty or imprisonment, for enforcing any law of the colony made in relation to any matter coming within any of the classes of colonial subjects.
15.Immigration (concurrent with Federal Parliament).
16.Generally, all matters of a merely local or private nature in the colony.

This classification of subjects would of course be open to rearrangement by the contracting colonies; but it will be seen that the principle upon which it is framed is this:—that purely local questions are left, as at present, to the jurisdiction of the local Legislatures, whilst subjects of common concern are transferred to the jurisdiction of a Federal Parliament, in which all the colonies would be represented in proportion to their population. The classification provides also, it will be seen, so far as is practicable, for local administration in cases even in which it may be necessary to lay down common principles. Thus, for example, whilst a uniform criminal law and procedure would be instituted by federal legislation, the civil law and procedure would be left for local settlement; and the page 14 administration of justice in both branches, including the constitution, maintenance, and organization of the Courts, would be under the exclusive authority of the colonial Legislatures. In like manner, the laws of marriage and divorce, which obviously should be similar amongst conterminous colonies, would be subjects for central legislation, but the solemnization of marriage in each colony, and the constitution, maintenance, and organization of Divorce Courts, would be matters of local arrangement.

As regards the other subjects referred to as likely to be transferred—such as tariff, trade, postal service, statistics, defence, navigation, and shipping, currency, bankruptcy, weights and measures, patents, copyrights, intercolonial lines of railway and telegraph, ocean steam communication, and ocean telegraph cables—the interlacing of interests between adjoining homogeneous colonies in reference to these questions, is too obvious to require to be elaborately described.

But it is sometimes urged (1) that questions such as these could be as well arranged between the colonies by negotiation as by federation; and (2) that if such arrangement is at present impeded by local jealousies and rivalries, such impediments would not in any way be removed by federation, but would still prove an obstacle to a satisfactory settlement.

As to the first point, it is only necessary to remark that all attempts which have hitherto been made to settle matters of common concern between the Australian colonies by means of voluntary conferences have resulted in complete failure. The causes of failure are inherent. The minority at a conference are not bound by the decisions of the majority. The decisions of the majority are not binding on their respective Legislatures. The votes are taken by colonies; and thus Western Australia and Tasmania, with their populations of 25,000 and 100,000, have as much weight in voting as New South Wales and Victoria, with their aggregate populations of a million and a half. The members, again, do not come to the Conference free to deliberate and decide upon the facts and arguments which may be laid before them, but merely as delegates, with the foregone conclusions of their respective Governments written within the four corners of their briefs. Each is generally bent on obtaining page 15 some special advantage for his own colony—"grinding his own tomahawk," as it is called—and collectively they have never given evidence of any feeling of community of interest, or of any desire to co-operate for the general good. Look, for example, at the last two Conferences held in Sydney. That of 1873 was held mainly for the purpose of coming to some agreement as to the renewal of the contract with the Peninsular and Oriental Steam Navigation Company for the mail service via Suez. Victoria came to the Conference with one fixed determination, viz., to make Melbourne the terminus for the mail steamers. It was in vain to point out that it would facilitate and cheapen the service, would be a convenience to New South Wales, and in no way prejudicial to Victoria, to allow the mail steamers, after dropping the Melbourne mails, passengers, and freight, to continue their journey as before with the mails, passengers, and freight for the Northern colonies, and that it would be better to allow the steamers to obtain coal for the return journey than to require them to remain idle in Hobson's Bay for a fortnight. Argument was of no avail. The Victorian delegates considered it necessary for the prestige and aggrandizement of Melbourne that that port, which had just completed a dock, should be the terminus of the mail service, and have the docking of the mail steamers. And this idée fixé, which was persisted in, rendered impracticable any agreement amongst the colonies upon this simple matter of common concern. The Conference, in consequence, proved a complete fiasco, the only subjects upon which the delegates could agree being some unreasonable applications to the Imperial Government. Her Majesty's advisers were invited to authorise the investment of Chancery Trust Funds in colonial Government debentures—securities over which the Home Government had no control, and for the solvency of which Parliament was not responsible. The Home Government was also asked to raise the scale of the alcoholic strength of the wines admissible into the United Kingdom at the minimum rate of duty (a course which would have involved a considerable, indeed a serious loss of Imperial revenue), so as to confer a special benefit on Australian wines, whilst with singular inconsistency the Conference asked, as it were in the same breath, that the restriction upon the imposition by page 16 the colonies of differential duties might be removed, so as to enable the several Australian colonies to admit the products and manufactures of their neighbours free, whilst imposing duties on similar articles when imported from the mother country. The last Conference, held a few months since, proved an equal failure. It was summoned to arrange for duplicating cable communication with Europe, the single line between Port Darwin and Singapore having been constantly interrupted. The position was this: a second cable was wanted to secure against interruptions, and could be provided for a subsidy of about £40,000 a year. The existing annual loss on working the trans-continental line between Adelaide and Port Darwin was about £40,000, and this would, of course, have been increased if by the connection of the second cable with any other place than Port Darwin the traffic were divided between competing land lines. With these conditions before a Federal Parliament, there would not have been the slightest difficulty in deciding what was, on the whole, the cheapest and the best way of duplicating cable communication, and thus providing against interruptions, seeing that the loss on transcontinental lines and the subsidies on ocean cables would have constituted charges on the Federal Exchequer. But it proved hopeless to attempt the settlement of the question by a Conference. New Zealand's "idea" was a Pacific cable. Queensland's "idea" was a second cable, to be landed in her northern territory. West Australia's plan was for a duplicate line to connect at the North-west Cape. None of these colonies would support any plan but their own. New South Wales was willing to pay for her proportionate share of the duplicate cable wherever it came to, and also of the loss on the South Australian trans-continental line. Victoria was prepared to pay her share of the duplicate cable irrespective of its point of contact, but would not listen to any proposal for recouping South Australia the loss incurred on her line to Port Darwin, although it was shown that one-half of the messages sent through that line were sent from Victoria. Eventually Victoria, New South Wales, and South Australia agreed to duplicate the existing cable from Singapore to Port Darwin, leaving any provision for the loss on the South Australian land line an open question. But in this proposal, although page 17 representing a compact population of nearly 1,700,000, they were outvoted by Queensland, Tasmania, West Australia, and New Zealand, representing widely scattered populations amounting in the aggregate to only 600,000. After such an experience what hope is there of each colony satisfactorily disposing of intercolonial questions of this character by arrangement or negotiation with its neighbours ?

We are thus led to the consideration of the second point—that if local jealousies and rivalries interfere at present with voluntary arrangements between the colonies, the same feelings would exist after federation, and would still present an obstacle to a satisfactory decision on matters of common concern. But such a plea overlooks the main difference between the conditions of the two eases. In one case the almost hopeless condition of unanimity is required; in the other, the majority would prevail. Besides, it overlooks what may be laid down as an axiom, that under systems of representative government external rivalries and jealousies influence legislation and administration, whilst internal rivalries are rendered comparatively nugatory. The conclusion to be deduced from this is that when external and internal relations become interlaced, the best mode of dealing with them is to enlarge the area of association.

Take a municipality for example. There are trade rivalries in every street; but whilst one municipality would not hesitate to aggrandise itself, if it could do so, at the expense of a neighbouring municipality, it would be slow to exercise its powers in the obvious interest of one establishment within its boundaries against another. Any attempt of the kind would be certain to be defeated by the majority of the municipal representatives, whose love of fair play, as they would probably have little personal interest in any individual rivalry, would prevail. So, too, in a colony there may be rivalries between towns—Sydney and Newcastle for example. But if any proposal were advanced that the San Francisco mail steamers should for the supposed advantage of Sydney be prohibited from going to Newcastle for their coals, should they desire to do so, there would not be any prospect of carrying out such a preposterous restriction. In the same way there might be rivalries between two towns in the same colony situated at equal distances from the capital page 18 on different lines of railway, and competing with each other for the business of the interior districts. But if it were proposed to lower the traffic rates on one line of railway below those on the other, so as to favour one town at the expense of the other, the matter would at once be brought before Parliament; and as the constituencies generally would have no direct interest in the matter, such a gross injustice would undoubtedly be defeated. But we see that these same rivalries, when external—that is, when existing between separate self-contained colonies—at once bear pernicious fruit. For example, there are trade and other rivalries between Melbourne and Sydney; and under such influences New South Wales reduces its railway fares below those of Victoria, so as to attract the traffic of Riverina from Melbourne to Sydney; and, as has been shown, Victoria on her side obliges her mail steamers to incur needless expense by remaining idle in Hobson's Bay for several weeks, instead of going on to Sydney, with their mails and passengers, to procure the necessary coals. If New South Wales and Victoria were provinces of one federation, such questions as through railways and ocean mail services would be under the control of the Federal Parliament, and special railway fares to divert traffic from one city of the Union to another, and regulations for the capricious detention of mail steamers in any port, in opposition to their own and the general interests, would be as impossible as similar proceedings would be at present within any one colony. The jealousies of Sydney and Melbourne would no doubt continue, but their influence in federal legislation and administration would be inoperative, in the same manner as the mutual rivalries of Sydney and Newcastle are now neutralised under the colonial system.

A consideration of the constitution of a Federal Legislature, and of the sources from which a Federal Exchequer would be supplied, serves to elucidate the natural operation of this correcting principle. In the central Parliament all parts of the federation would be represented in proportion to population, and the federal revenue, being mainly derived from a uniform tariff, would in effect be contributed in the same proportion. Any proposal, therefore, to appropriate the general funds needlessly and unfairly for the page 19 aggrandisement of one province or city at the expense of the whole, would have but little chance of success. Take, for example, the question of coinage—a federal function the cost of which would be defrayed from federal funds. If it were shown that one mint was sufficient for all the purposes of the union, and that a second establishment was simply a waste of money, what prospect would there be of persuading the various provinces of the federation to agree to the needless annual expenditure of say £10,000 or £15,000, exclusive of capital outlay, simply to gratify the vanity of a small minority in a city or province who might wish that the Imperial prerogative of coining should be directly associated with their locality ?

So far then from local jealousies being likely to prove as great an obstacle to the settlement by a Federal Government of matters of common concern, as they are at present to voluntary arrangements between the colonics, it has been shown that the system of federal association contains within itself the natural palliative for such rivalries. Indeed, it would not only counteract the evil effects of local jealousies, but would diminish the intensity of such feelings. Defences, military and naval forces, the mint, ocean mail services, telegraphic cables, intercolonial railways, and other large public works and undertakings would no longer be subjects for mere provincial congratulation, but would be the common possessions of the whole dominion, in the honour and glory of which every colonist would have an equal share.

The advantages which would accrue to the several Australian colonies from the comprehensive treatment by one central authority of matters of common concern are too obvious to need much further elucidation. Whatever system of taxation wore adopted, there would, under federation, be complete freedom of trade between the colonies themselves. All border duties and other intercolonial tariff collections would be for ever swept away. Intercolonial railways and telegraphs, ocean mail services, ocean telegraphs, defences, the collection of statistics, and other similar services and undertakings of a federal character before referred to, would be conducted with the utmost efficiency and economy in unison with the general interests of all. Look, for example, at the beneficial effect of such a policy on the page 20 consolidation and management of the public debt. At present the indebtedness of the Australian colonies (exclusive of New Zealand) amounts to nearly forty millions sterling. This debt is distributed over about fifty or sixty different loans, of varying amounts, the debentures of which bear interest at rates ranging from 4 to 6 per cent., and mature at different dates and places. It requires the calculations of an actuary to determine the precise relative value of these various securities, and the purchasing public at home are mystified and perplexed in consequence. Under a Dominion of Australia this debt might be consolidated into or 4 per cent, stock at a profit of many millions sterling; and Australian consols would then be as well known and as negotiable on every exchange in Europe as the English funds, and would be second to them only in public estimation and value.

But however earnestly every sincere well-wisher of these colonies may long for federation, there is no denying the fact that the time for their union has not yet arrived. Before they can join hands with any prospect of comfort or advantage, they must first think alike on questions of vital importance. At the present moment the federation of these colonies, considering the preponderating influence of the population of Victoria, could only be carried out on the basis of protection, and those who believe that it is by acting up to the great principle of commercial association, as distinguished from commercial isolation, that every portion of this magnificent continent will soonest attain the great position which it is eventually destined to occupy, will prefer disintegration to redintegration under such retrograde conditions. Meanwhile, good may be done by discussing the precise bearing of the changes which federation would involve, by investigating the circumstances which will promote or retard such a consummation, and their influence upon the progress and prosperity of the country. The attention which has of late been directed to this question, both at home and in Australia, has doubtless done good by familiarising men's minds with the idea; but before any practical move can be made in the direction desired, the failure or success of the economic problem which is now being worked out in Victoria, must be clearly establisned and acknowledged.