tranquillity has been preserved. The twelfth anniversary of the proclamation of the Republic was celebrated on February 15 amid such general enthusiasm as would indicate complete satisfaction with the existing form of government. The relations of Brazil with its neighbours, as with other Powers, have been devoid of incident.

Uruguay.-Trade depression has been the characteristic of the year, coincident with political discontent and agitation. The Customs House receipts for the first nine months of 1901 amounted to $8,221,513. The Government of Señor Cuestas has added two new regiments of cavalry to the Army on the plea that the condition of the interior called for the increase. It was feared that the elections in the autumn would be attended by civil war, but the composition of the new Chamber is said to assure peace to the country for the next two or three years. A more hopeful prospect for Uruguay opened with the New Year.

VII. THE PAN-AMERICAN CONGRESS.

The Pan-American Congress, which was opened at the capital of the Republic of Mexico on October 22, delegates from North, South and Central American countries being present, was promoted chiefly by the United States with the object of discussing the questions of arbitration, trade relations, telegraphic and railway communications, professional qualifications, and similar topics of common interest. Underlying the project of the Congress was the idea of United States politicians, not only to encourage trade with the Southern Republics, but eventually to form some kind of Zollverein by which the United States would absorb the trade between the Republics and Europe. This ambitious project was not, however, materially advanced, and the principal subject dealt with at the Congress was that of compulsory arbitration, the delegates finally deciding upon an agreement as to arbitration based upon the Hague Convention, to which all the States represented at the Congress will become parties. It remains, however, for the States themselves to make the necessary treaties before the action of the delegates becomes operative. The decision as to arbitration was not reached without considerable difficulty. The Argentine Republic, for example, was willing to apply compulsory arbitration to all pending or future disputes, and in this had the support of Peru and Bolivia, but Chili and Ecuador, having regard to undetermined frontier questions, wished to restrict the principle to future disputes only. In the result, the Congress unofficially brought the States into line with the United States as a party to the Hague Convention. The Congress was therefore of academic rather than practical interest, and its chief work was the passage of a resolution affirming that the principles of the Hague Convention were part of the international law of the

States represented at Mexico. The committees to which the questions of an international railway, international bank, telegraphic communications and a common standard of professional qualifications were referred, were still sitting at the close of the year, and it was doubtful whether the practical difficulties inherent in them could be overcome.

H. WHATES.

CHAPTER IX.

AUSTRALASIA.

I. THE AUSTRALIAN COMMONWEALTH.

THE year 1901 marked the beginning of a new epoch for Australia. On January 1 the Australian Commonwealth came into existence. Henceforth the six Colonies, by their own act, were joined in one Federal Union, ceasing to be Colonies and taking the name of States-merging their separate existences into one dominion and one joint life under the broad flag of England, while preserving their individual constitutional liberties. For the first time in the history of man one nation occupies a whole continent.

This great work, so splendid a testimony to the self-governing capacity of the British race, was accomplished under the happiest auspices. On the first day of the new year and the new century the Federal Government was inaugurated at Sydney with the most imposing ceremonies and amidst immense enthusiasm. The presence of an Imperial contingent of soldiers, representing all branches of the service and all the leading races of the Empire-Guards, Highlanders, Infantry, Cavalry and Artillery, with detachments of Indian troopsnot the least picturesque and popular feature of the ceremony, gave extraordinary grace and éclat to the inaugural demonstration, and invested it with peculiar meaning and dignity. Such a sight was never before witnessed in the Southern Hemisphere, giving to the act of Australian Confederation that Imperial character which is at once the happiest omen for the future of the Commonwealth and the strongest assurance of its safety and integrity.

The new Federal Government, the composition of which had been previously determined, was announced on January 1. The Cabinet was formed to represent the various States as fairly as possible, having regard to the inequalities of extent, wealth and population. Mr. Edmund Barton, who had been foremost in promoting the scheme of federation in New South Wales, assumed the offices of Prime Minister and Minister of External Affairs; Sir William J. Lyne, late New South Wales Premier, was Minister for Home Affairs; Mr. Alfred Deakin,

of Victoria, was Attorney-General and Minister of Justice; Sir George Turner, late chief of the Victorian Ministry, was Treasurer; Mr. Charles Cameron Kingston, of South Australia, was Minister of Trade and Customs; Sir John Forrest, of Western Australia, Postmaster-General; and Sir James R. Dickson, of Queensland, Minister of Defence. Of these seven members of the Cabinet all except the last were natives of Australia. The death of Sir James Dickson within a few days of his nomination to office necessitated some changes in the constitution of the Ministry, his place being supplied by Mr. James G. Drake, of Queensland, who became Postmaster-General, Sir John Forrest being made Minister of Defence.

Five out of the seven Members of the original Federal Cabinet had been Prime Ministers in their respective Colonies. All of them, except Sir James Dickson, were reckoned as Protectionists. But, according to the declarations of Mr. Barton and others of his colleagues at various public meetings, their fiscal policy was to be one primarily aimed at the supply of revenue. A sum of between 8,500,000l. and 9,000,000l. would be required for the purposes of the Federal Government, according to the Constitution, and this could be raised only by Customs and Excise duties. The Commonwealth Act provided that the Federal expenditure for ten years must not be more than one-fourth of the net revenue from Customs and Excise-the balance to be refunded to the States, or devoted to payment of interest on debts taken over. Uniform duties had to be imposed within two years from the establishment of the Commonwealth, all inter-State duties being abolished, with absolute freedom of trade throughout the States. For five years after the imposition of uniform duties the consuming States were to be credited with the import and Excise duties paid on the articles, but, subject to that proviso, the Commonwealth was to credit revenue, debit expenditure, and pay balances to the several States, as prescribed in Section 89 of the Commonwealth Act.

As some of the States, up to the passing of confederation, had adopted a policy of Free Trade, while others had favoured Protection, the fiscal policy of the new Federal Government had to be based on a compromise between the two systems. Such a compromise, to be just, would necessarily involve the raising of the Customs duties in the Free Trade States, and the lowering of the duties in the Protective States. Mr. Barton, the Federal Premier, who had been the leader of the Protectionist minority in New South Wales, a Free Trade State, was in a position of some difficulty. The first and most perplexing of the problems before the Federal Government was the adjustment of its financial policy, so that while due regard was had to the individual interests of the several States, a sufficient provision might be made for the national exchequer to meet the new demands of that larger life into which the associated States had entered.

In one of his earliest public pronouncements, Mr. Barton indicated clearly the broad lines of the Ministerial policy. He insisted on the necessity of a wide programme and "the higher politics." The Constitution would have to be carefully regarded. There would be "a moderate Protectionist tariff." A promise was held out of subsequent preferential duties in favour of the mother country, and to comply with Imperial aspirations. The Commonwealth, Mr. Barton contended, "could not afford duties high enough to kill revenue." The prohibition of coloured immigration was also made a part of the new Federal policy.

The elections for the two Houses of the Federal Parliament were held in all the States, according to the new law of the Constitution, on March 30. There having been no time for the formation of parties, the issues set before the electors were somewhat complicated, and the results doubtful and uncertain. The chief question necessarily arising out of the composition of the Ministry was that of the Federal tariff. The parties were broadly divided into those in favour of a high tariff or Protection, and those inclined to a low tariff or Free Trade. The Ministry itself could not be identified, after Mr. Barton's declarations, with either one or the other party. The Labour party, which by its simplicity of programme and careful husbandry of its forces had arrived at a commanding position, out of proportion to its numerical strength in the Commonwealth, was itself almost equally divided on this question-Free Trade being deliberately excluded from the "platform" of the Trades Council in New South Wales and elsewhere. In these circumstances, not much significance could be attached to the results of the polling for the Federal Parliament, it being yet too early in the history of the Commonwealth to predicate the character of the policy preferred by the people of Australia.

Dividing the Members returned into the two categories of high tariffists and low tariffists, the following is a summary of the general result in the six States :

According to these figures the parties in the two Houses appeared to be very evenly balanced. While the Free Traders had a majority of six in the Upper House or Senate, the Protectionists had a majority of five in the House of Representatives or popular Assembly. As the Senate, though practically based on the same suffrage as the House of Representatives, is elected specially to represent the States, each State, as in America, having the same number of Representatives (six) without regard to size or population, a majority of six in favour of Free Trade may be regarded as indicating broadly the general opinion of the individual States on this dominant question. The result would have been even more favourable to the Free Traders had the Senate elections for Queensland been held on the same system as in the other States. While in all the other States the whole State votes as a single electoral district for the Upper House, in Queensland that law is not yet in force; so that the elections for the Senate are merely an echo of the elections for the Lower House. Though Queensland, as a State, is distinctly in favour of a low tariff, the Labour party in Queensland is more powerful and better organised than elsewhere, and the Labour party preferred to make the employment of Kanakas in the sugar plantations the test question, rather than any other. Its opponents being divided and undisciplined, the result was to give an undue advantage to one section of politicians in the Northern State, and to invest its representatives in the Senate with a disproportionate share of voting power, so that the result in Queensland may turn out to be only a nominal victory for the high tariff party.

The electoral returns, even on the question of the tariff, gave no clear indications of the policy of the Federal Government. On several minor issues the Parliament was divided, and though the Ministry claimed a majority it was not of a kind to promise a long life to Mr. Barton and the Cabinet he had formed to carry on the business of the Commonwealth.

The first session of the Federal Parliament was opened by the Duke of York, representing the Sovereign, on May 7. The Earl of Hopetoun, as Governor-General, delivered an address announcing the policy of the new Administration. The Federal tariff was declared to be the first work of Parliament. In it the revenue was the first consideration. The existing tariffs in several States had created industries so substantial that any policy aimed at their destruction was inadmissible. The Federal tariff "must operate protectively as well as for the production of revenue.' Other principal measures announced were the abolition of Kanaka labour, a bill for conciliation and arbitration in trade disputes, a bill for adult suffrage in Federal elections, and a bill for providing old-age pensions.

Sir Richard C. Baker was elected President of the Senate, with Mr. R. W. Best as Chairman of Committees. Mr. R. W. Holder, a former Member of the South Australian Government,