In 1869 authority had been obtained from Parliament to liquidate the accumulated deficits by the issue of Treasury bills for the sum of £350,000, the increased duties of Customs imposed for temporary purposes in 1866 being at the same time continued for twelve months. In January, 1872, the Treasurer (Mr. Bell) referred in committee of the Assembly to the accumulated deficit, stating that the Treasury bills which had temporarily provided for it were falling due, and that there was no hope of paying the amount out of revenue. He therefore announced the intention of the Government to retire the bills and fund the debt by issuing long-dated debentures. That having been done, the effect was to produce a surplus for the year 1872 of £487,333. This indicated that had the Government exhibited a little more confidence the whole amount of the deficit might have been paid off out of revenue; for in the next year, shortly before the Palmer Government went out of office, a further surplus of £158,874 was realised. This sum, with the excess surplus of £137,333 for the preceding year, totalled £296,207, leaving only £53,793 short of the entire amount of the Treasury bills. In the next year there would have been a surplus, but the Macalister Ministry, which assumed office early in January, 1874—Mr. William Hemmant being Treasurer—carried £240,000 to a surplus revenue account, and ended the year with a revenue deficit of £200,762. While the revenue of that year only increased by £40,913, the expenditure, in addition to the surplus revenue item, increased by £160,550. The Macalister Ministry could not keep down expenditure, and in 1875-6—the end of the financial year having been changed from December to June—with a revenue slightly exceeding 1¼ millions, they had a further deficit of £51,663. The same party continued in power for a further two years under the leadership successively of Mr. George Thorn and Mr. John Douglas. Revenue continued fairly elastic, and the deficit period was followed by two years showing small surpluses.
HINCHINBROOK CHANNEL, NORTH QUEENSLAND
THE NARROWS AND MOUNT LARCOMBE, NEAR GLADSTONE
Early in 1879 the McIlwraith Ministry assumed office, at a time when, as the Premier himself admitted in his Budget speech of 1880, the colony was "emerging from a state of depression induced by three bad seasons of an extraordinary character," so that the year 1878-9 closed with the considerable deficit of £216,808. This was partly due, however, to the operation of the Western Railway Act and the Railway Reserves Act, by which the most saleable land in the colony had been included in railway reserves, and the proceeds of sales, instead of as previously going into consolidated revenue, were placed to the credit of a special fund. Mr. (afterwards Sir Thomas) McIlwraith while in opposition had predicted that this course would produce a revenue deficit; consequently on attaining office he induced Parliament to sanction the transfer of all these sums, totalling £382,346, to consolidated revenue. Mr. McIlwraith argued that it would be impossible to construct a tithe of the railways needed in different parts of the colony out of the proceeds of land sales, and that it would be sufficient if the interest on railways, until they became fully reproductive, were defrayed from that source. Parliament accepted that view, and forthwith authorised a loan of 3 millions for a comprehensive schedule of railways proposed by the Government in 1879-80. Between August, 1879, and May, 1883, loans amounting to £5,553,000 were floated and a further sum of £1,233,000 was authorised, but not placed on the market. During the McIlwraith Administration of 1879-83 the revenue increased from rather less than 1½ millions to 2½ millions. The period was characterised by two deficits and three surpluses, showing accumulated surpluses of £272,412, without taking into account the sum of £382,346 transferred to revenue. During these years the colony was prosperous, the fair seasons, large loan expenditure, the establishment of the British-India service via Torres Strait, and the free introduction of immigrants, all combining to push the country along the path of progress; but prosperity had compelled a pro rata increase of expenditure.
At the end of the quarter-century in 1884 the public debt was £16,570,850, on which the interest charge was £701,565. Of this amount £9,417,318 expended on railways was earning £2 18s. per cent. The length of lines open for traffic totalled 1,207 miles. The population was 309,913. About £2,350,000 had been spent on immigration, of which nearly a third of a million had come from revenue, £1,778,000 from loan, and the rest from "special receipts"—partly contributions from immigrants. The year's imports were of the declared value of £6,381,976, and the exports £4,673,864. Joint stock bank assets exceeded 11 millions, liabilities were nearly 7¾ millions, deposits exceeded 6 millions, and savings bank deposits were over 1 million. Of cattle there were 4¼ millions, of sheep less than 9½ millions, while horses numbered 253,116. There were 6,979 miles of telegraph line constructed. There were over 7 million acres of land alienated, which had produced over 4¾ millions sterling of revenue. The value of minerals won for the year was £1,325,624. There were 528 schools with 60,701 scholars, 5,185 subscribers to public libraries, and 60,257 volumes. Comparing these figures with those of 1860 it will be seen that, despite droughts, floods, and financial crises, the progress attained had been phenomenal.
Thus in a financial aspect the first quarter-century closed glowingly, despite a severe Western drought in 1883. There had been rapid and apparently solid progression, and the disasters of 1866, which seemed at the time to threaten the solvency of Government and people alike, had become an unpleasant memory—a catastrophe very unlikely to recur for various reasons, among them being that the railways were beginning greatly to facilitate transport, as well as to show considerable net earnings; while instead of the Government borrowing at 6 per cent., as formerly, money in abundance could be got at 3½ per cent. Moreover, mortgage loans and bank overdrafts bore a greatly reduced rate of interest.