AUSTRALIAN FEDERAL DEBT. 563 



Utjion, and I propose to deal with the important question of 

 " Public Debt." 



It has been suggested that, in the event of Federation the 

 whole of the Public Debts of the Australian Colonies should 

 be taken over bodily by the Federal Government and treated 

 as a national affair ; but a little consideration will probably 

 lead to the conclusion that such a step is not only imprudent, 

 but impolitic from an econo/nic point of view. 



From a perusal of the draft bill " To constitute the 

 (Commonwealth of Australia," recently adopted by the 

 National Australasian Convention held in Sydney in 1891, 

 one may form an adequate idea of the powers to be handed 

 over to, and of the functions to be performed by, the Federal 

 Government. Amongst a list of 31 matters enumerated in 

 the Bill, which it is proposed should be provided for by federal 

 legislation, perhaps the following are the more important from 

 a financial point of view, viz., trade and commerce, customs 

 and excise bounties, borrowing money, postal and telegraphic 

 services, defences, navigation and shipping, &;c., the control of 

 railways with respect to transport for the purposes of the 

 commonwealth. 



From this it will be seen that the customs will form the 

 main source of general revenue, the balance left after payment 

 of expenses being I'eturned to the subsidiary governments. 

 It is however, not proposed, except temporarily in case of special 

 emergency (such as transport of troops on railways in time of 

 invasion), to take over, nor is it likely the different colonies 

 would part with, the control of the railways, waterworks, and 

 other public works of a reproductive character, for which the 

 public debts were mainly incurred. This being the case, it is 

 unreasonable to expect the Federal Government to render 

 itself responsible for such works — over which it could exercise 

 no control and from which it would derive no income. And 

 considering that the works to be handed over are of com- 

 paratively small financial importance, the question naturally 

 arises, in what manner the several colonies might, either with 

 or without the assistance of the Federal Government, succeed 

 in obtaining further funds for their necessary reproductive 

 works in the best and most economical manner possible? 



In order to deal adequately with this question, it will be 

 necessary first to review the present condition of the Australian 

 Public Debt ; its ]iast and probable future growth and present 

 prospects ; the purposes for which contracted ; the present 

 rates of interest ; and the dates of repayment. 



