686 AUSTRALIA 



its administration, and to pay a fixed annual subsidy to the state governments of 253 per 

 head of the population resident in each state. In addition it has to meet the cost of the 

 trans-continental railway from west to east already in process of construction; of the pro- 

 posed trans-continental railway from north to south; and also of the administration of the 

 Northern Territory, taken over from South Australia. 



The early years of Federation were hampered by the want of revenue owing to the opera- 

 tion of the "Braddon clause" of the Constitution. But it was possible to make great 

 changes in the financial position when Mr. Fisher took office in 1910. The lapsing of the 

 Braddon clause gave him a larger share of the Customs and Excise receipts. The Land 

 Taxes he imposed brought in a revenue of 1,370,344 in the financial year 1910-11. The 

 Australian Notes Act which he passed made the Commonwealth Government the issuing 

 authority for bank notes up to the value of 7,000,000, against which a gold reserve of one 

 fourth that amount was to be kept. The issue might go above 7,000,000, but for any sum 

 above that limit a gold reserve equal to the full issue had to be kept. A subsequent Act 

 abolished this qualification, and left the amount of the issue unlimited provided that a gold 

 reserve of 25 % of the total was maintained. Serious objection was taken to this amend- 

 ment in financial quarters, and Mr. Fisher undertook not to put the amending Act in force 

 until after the General Election of 1913. At the same time as the Australian Government 

 note issue was authorised, a tax of 10% per annum was imposed on the amount of all notes 

 issued by private banks and any note issues by state governments were prohibited. Also 

 a Commonwealth Bank, having all the ordinary functions of a bank, with a Savings Bank 

 Department superimposed, was established, and opened its doors in 1912. In 1912 the 

 Commonwealth note issue had reached to 10,048,472, against which a gold reserve of 

 4,841,536 was held. 



The growth of Commonwealth revenue 'since 1906 is shown below in thousands of 

 pounds, which disregards small items, except in the computation of the grand totals: 



1912-13 

 1906-7 1908-9 1910-11 1911-12 Estimate 



000 000 000 000 000 



Customs and Excise . 9,631 ,10,844 12,980 14,710 14,511 

 Post and Telegraph , 3,128 3,409 3,906 3,916 4,202 



Land Tax i .. . . , .... 1,370 1,366 1,300 



Total ..... 12,816 14,350 18,806 20,546 20,422 



The expenditure has also grown. Excluding the subsidy paid to the states, the Australian 

 Government spent 4,987,317 in 1906-07, 7,499,516 [in 1909-10, and 13,158,529 in 1910- 

 II (the chief increase that year being in respect of the construction of the Australian Navy), 

 14,297,572 in 1911-12, and (estimated) 16,604, 791 in 1912-13, of which, however, 2,261,541 

 did not come out of current revenue. Expenditure grows in all departments as new respon- 

 sibilities call for outgoings. The deficit on Northern Territory administration for example 

 was 166,856 in 1911 (a half-year only). On the other hand the subsidy to the states, which 

 in 1906-07 was 7, 845,574 and in 1909-10 8,492,436 under the Braddon clause, dropped in 

 1911-12 to 5,824,423 under the new system of a definite subsidy of 255 per capita. 



The debts of the various states can best be referred to here Because the Commonwealth 

 Government sought in 1910, and was granted by Act of Parliament and Referendum, the 

 right to amend the Constitution so as to take over all the State debts and make them into 

 one Federal debt. The total of the State debts outstanding in 1911 was 271,750,944, and 

 they have largely increased during 1912. The total is represented in the main by such solid 

 assets as railways. The transfer of these debts to the Commonwealth would involve, 

 presumably, the transfer of the assets which stand against them, and would also necessitate 

 some arrangement for Federal control of future borrowing. The Prime Minister announced 

 in September 1912 that he was devoting earnest attention to the matter. 



Finance (Private). There are twenty-one private banks trading in Australia. Their 

 paid-up capital totals 20,181,758, and their reserved profits total 10,330,457. Their 

 total deposits in 1911 were 143,446,910, and the total of the advances made by them 

 108,578,774. Their total liabilities were 148,835,219 and their total assets 159,565,443. 

 The last dividends of the four greatest banks were 10 %, 10 %, 14 % and 12 % respectively 



The Savings Banks' figures show a prosperous and thrifty working population. In 

 1911 there were 1,600,112 individual depositors in the Savings Banks of Australia, a pro- 

 portion of 362 to every thousand of the population. The total of deposits was 59,393,682, 

 giving an average deposit of 37 . 2s . 4cl. per depositor, or of 13 . 8s . 5d. per head of the whole 

 population. The life assurance figures impress the same lesson. There were nearly a 

 million life assurance policies in force in Australia for 1910. More than half of these were 

 for small amounts, but the total sum assured, exclusive of bonus additions, was about 

 110,000,000. Further the Friendly Societies have a total membership of 400,000 and a 

 yearly revenue of 1,538,532. 



