247 



criminals on an island within forty-eight hours' steaming of the 

 Queensland coast. He drew a vivid picture of the horrors that 

 might ensue if, on a rupture with France, the 20,000 convicts already 

 in New Caledonia were turned loose to ravage and destroy in the 

 sparsely populated territory of the northern colony. A burst of 

 enthusiastic support was aroused in all the Colonies, but the British 

 Colonial Department did not catch the fever, and were freely 

 charged at the Antipodes with supineness and even with imbecility. 

 International considerations had apparently greater weight in Europe 

 than was accorded to them in Australia, and while correspondence 

 was passing, Germany stepped in and took possession of the north- 

 ern half of that portion of New Guinea which was not claimed by 

 Holland, and Great Britain was fain to be content with the eastern 

 end, and that portion of the south coast that overlooks the great 

 maritime highway of Torres Strait. Mr. Service always maintained 

 that the failure of his efforts in this direction was due to the hostil- 

 ity of Mr. Stuart, then Premier of New South Wales, who, having 

 nothing of the lust of Empire about him, declined to commit his 

 Government to a share in the expenses and responsibility of control. 

 The agitation, however, was not without benefit, for it saved the 

 New Hebrides from seizure by France, and diplomacy secured a 

 satisfactory modification of that country's policy in the matter of 

 the recidivistes. 



Successful as the Service Government was in local legislation 

 and matters of international concern, the period was perhaps most 

 happily distinguished by the satisfactory handling of the State 

 finances by the Treasurer. Under Sir Bryan O'Loghlen they had 

 drifted into a somewhat chaotic condition, involving the constant 

 borrowing of trust funds, and the incurring of heavy obligations in 

 anticipation of the floating of loans. Indeed, it was a startling 

 discovery to Mr. Service to find, on taking charge, that his prede- 

 cessor had not only used up all the cash balances, and borrowed 

 from trust funds to the extent of nearly a million sterling, but had 

 also incurred liabilities of at least another million for purchase 

 under contract of rails and rolling stock for about 800 miles of rail- 

 way, the construction of which had not been authorised by Parlia- 

 ment. It required firmness, patience and financial knowledge to 



