COMMERCIAL AND INDUSTRIAL. 1405 



which gives local financiers any concern is that it is nearly all foreign debt, and this 

 has arisen from the fact that money for investment is much more abundant in England 

 than it is in the colonies. In the older colonies some small quantity has been locally 

 raised. In Victoria some portion of the railway expenditure was defrayed out of surplus 

 revenue, and in New South Wales there is a local funded stock at four per cent. ; and 

 there have in all the colonies, from time to time, been temporary local loans, in tin- 

 shape of Treasury bills, to enable the Government to tide over periods of financial 

 trouble. The negotiation of local debt to any large extent has necessarily been checked 

 by the greater cheapness of money in London. The Government could not possibly 

 borrow in the colonies at less than four per cent., and could get only a small quantity 

 at that rate ; and the banks and their customers do not favour any large absorption of 

 the local surplus wealth of the Government, as that would check the accommodation given 

 to banking customers. So long as money can be borrowed in England at three and a 

 half per cent., the local Governments will continue to go to the metropolitan market. 

 At the same time, the nominal rate of borrowing is not quite the real rate, as there 

 are expenses for brokerage, agency and remittance, which would not have to be incurred 

 in the colonies. That there is a large amount of what may be considered floating and 

 uninvested capital in the colonies themselves is sufficiently evident from the fact that the 

 gross deposits in the Australian banks amounted in 1887 to ^94,000,000. Some of this 

 may have been English capital awaiting investment, but the greater portion represented ac- 

 cumulated colonial wealth not permanently invested, and deposited with the banks pending the 

 discovery of any better occupation for it. These deposits constitute practically the work- 

 ing capital of the banks, for their paid-up capital is small compared with the amount 

 which these financial institutions borrow from one set of colonists to lend to another. 



THE RAILWAY SYSTEM. 



RAILWAYS and rivers are the two great channels of inland intercommunication 

 available for a people's enterprise. Some countries are, fortunately for themselves, 

 well favoured by the endowment of Nature with one of these aids to development. 

 Australia has not been so fortunate. Our water-courses, with the' exception of a few, 

 are neither navigable nor large, and even such as we have are available only under 

 certain circumstances. It is some evidence of our enterprise and determination as a 

 people that, since the sod of the first railway was turned in Australia, a little over 

 forty years ago, we have never relaxed in our persistent effort to link all parts of the 

 eastern side of the Continent together in iron bands. As the beginnings of colonization 

 had their rise in New South Wales, so, of course, had the Australian railway system. 

 And it is important to notice that the beginning was quite in conformity with English 

 ideas. Nearly all our railways are public property, but they began in an attempt at 

 private adventure. The change has not been due to any economical theorising, but to 

 the compulsion of circumstances. The colonists were not rich enough for the work, and 

 English capitalists were not at that time awake to the opportunity, and so what private 

 enterprise began drifted unavoidably into the hands of the Government. Our railway 

 policy has been made for us, rather than by us. 



