382 A HISTORY OF THE COLONY OF VICTORIA 



debenture loan with such a security was undoubtedly high. The 

 Corporation joyfully assented, the Government concurred, and Mr. 

 Gabrielli, having arranged an interim advance from the Bank of 

 Australasia, promptly carried the debentures to London, and placed 

 them on the Stock Exchange, at a substantial premium for his own 

 reward. His assumed connection with the Eothschilds was never 

 verified, and the 25,000 he was reputed to have cleared by the 

 operation was probably the reward of his own astuteness. 



This was the first attempt of Victoria to tap the British money 

 market by direct borrowing, for the Government, though its finances 

 were in great confusion, had a continuously growing revenue, until 

 some years later, when the outlay for railway construction began 

 to outrun it, and the example of the Corporation was then followed. 



The net revenue of the colony, which in 1851 was only 380,000, 

 was largely augmented in the following year by the surrender to 

 the local administration of the gold fund, and the unappropriated 

 moiety of the land sales fund, hitherto reserved to the Crown. In 

 the three years under review the figures were for 1852, 1,634,000, 

 for 1853, 3,235,000, and for 1854, 3,088,000. The expenditure, 

 however, mounted up with startling rapidity. It was under a 

 million in 1852, but sprang up next year to 3,216,000, and in 

 1854 to 4,186,000. The chief items of this large increase were 

 in the Public Works Department, the outlay for 1852 being only 

 'about 130,000, while the expenditure of the two following years 

 reached the enormous total of 3,000,000. The next largest increase 

 was in the Police and Penal Departments, where the cost rose 

 from 100,000 in 1852 to an average of 600,000 for each of the 

 two succeeding years. 



When Sir Charles Hotham arrived in June, 1854, he was con- 

 fronted with a prospective deficiency for that year of over a million 

 sterling, and he found estimates for the following year submitted 

 to the Council contemplating a further expenditure of 1,800,000 

 on public works. He had been warned before leaving England, 

 by the Secretary of State for the Colonies, that unless he exerted 

 his influence to adjust expenditure to income, something resembling 

 national ruin was in sight. The Governor lost no time in making 

 an attempt to comply with this unpopular duty, but before submit- 



