to the Commonwealth for re-loan to the States. Much of this money was required to meet old loans falling due, while the balance was wanted for the vigorous prosecution of railway construction and other public works. In view of the considerable dislocation in private industry owing to the war, especially in mining, it was deemed desirable that both the Federal and State Governments should continue development works during the war, and so avoid unemployment and distress. The Government proposed a slight increase of the Land Tax and a revision of the tariff, with still further preference to British as against foreign goods. Probate and succession duties were for the first time imposed by the Commonwealth. During the year Sir George Reid, the High Commissioner in London, visited Australia, and made a number of notable Imperial speeches, and was everywhere received with enthusiasm. His term of office, which was to have expired early in 1915, was extended for one year. Earl Grey, and Sir Hartmann Just of the Colonial Office, made notable visits to Australia. The tour and Conference of the British Association, which had been so keenly anticipated by the people, were in a large measure circumscribed by the outbreak of the war. A little event of much significance was the launch from the Government docks in Sydney Harbour of a torpedo destroyer which had been built entirely by Australian labour, and, with the exception of the plates, of local materials. At the same time, it was announced that a cruiser and a number of other destroyers were in the course of construction. Following upon the excellent reports which Royal Navy officials in command of the Commonwealth Navy gave of the young native-born Australians who made up the larger part of their crews, this first successful essay into the building of a warship was regarded with the utmost satisfaction. It seemed to have established conclusively that the young Anglo-Saxon in Australia had fully inherited the genius of his forefathers for shipbuilding and seamanship. In a modification of the initial Navy programme laid down a few years ago by Admiral Henderson, provision was made for the construction of two light cruisers and two improved submarines, instead of torpedo destroyers. Considerable progress was made with the various training colleges, naval bases and other matters dealing with the defence system. Sir Ian Hamilton, in his special report upon Commonwealth forces, congratulated the Government upon the fitness of its land defences. He expressed the opinion that the whole of the regular Force and 75 per cent. of the Militia serving at any particular time were sufficiently trained and equipped to engage in modern warfare at forty-eight hours notice, while within another fortnight the balance of the Militia, together with 20,000 members of rifle clubs, could be put into the fighting line.

In New South Wales the drought was not so severe as in

Victoria and South Australia. In the wide Riverina district the pinch was severely felt, but on the dairying areas, especially along the North Coast, the season was more favourable and productive than any previously enjoyed, while much of the pastoral country had a fair season. The Labour Ministry continued in office, and having a sound working majority pushed on actively with legislation. In January a new Ministry was formed as follows: Premier and Treasurer, Mr. Holman; Chief Secretary and Minister for Mines, Mr. Cann; Attorney-General and Minister for Justice, Mr. Hall; Lands, Mr. Trefle; Works, Mr. Griffiths; Public Instruction, Mr. Carmichael; Agriculture, Mr. Ashford; Labour and Industry, Mr. Estell; Vice-President of Executive Council, Mr. Flowers; Honorary Minister, Mr. Hoyle. The Treasury estimated the revenue for the financial year at 18,380,000l., an increase of 2,120,000l., and the expenditure at 18,342,000l. In October, however, Mr. Holman, in the course of his Budget speech, estimated that owing to the reduced earnings in consequence of the war, there would be a shortage on the year of 340,000l. To overcome this he proposed a temporary super-tax on incomes and a tax on motor cars. The Government awakened much controversy by its decisive actions in connexion with the war. As a precaution against the operation of market manipulators, the whole of the available wheat supply was seized. The Government also announced its intention and provided the necessary purchasing machinery to take over the whole of the wheat crop then ripening at an arbitrary price of 5s. a bushel. The Government also took active steps to encourage the cultivation of a large wheat crop for the ensuing season. Towards this end farmers were guaranteed a minimum price of 4s. a bushel for their grain, and it is expected that as a result of this measure the area sown will show an increase of 1,000,000 acres, and that the crop, given a moderate season, will exceed 60,000,000 bushels. The best record to date is 37,000,000 bushels for 1913-14.

In Victoria the chief political event was the unexpected resignation of Mr. Watt as Premier in favour of Sir Alexander Peacock. Mr. Watt at once announced his intention of taking an active part in Federal politics, and entered the House of Representatives at the general election. Sir Arthur Stanley was sworn in as State Governor in February. The Premier announced a definite sustained policy of railway construction at a cost of from 600,000l. to 700,000l. a year. At the general elections in November the Liberals retained office with a majority of 43 to 22 over the Labour Opposition, all Ministers being re-elected. The Treasurer in his Budget Speech in December estimated the revenue at 10,600,000l. which was an increase of 3,000,000l. within twelve years. He pointed out that the total loans of the State amounted to 66,000,000l. of which no less than 27,000,000l. were now held by the Victorian people

themselves. There was no increase in taxation for the present year, but income and stamp duties would be slightly raised within the next four years. It was claimed that the State shipbuilding yards and coal mines had paid their way, and justified the policy which led to their establishment. The season was extremely unfavourable, probably the worst Victoria had ever experienced. The shining exception was upon the great irrigation districts in the north, where the settlers, with their unfailing supply of river water, had a year of very heavy production, and reaped the full advantage of the high prices prevailing for all kinds of produce; in fact, the great illustration afforded of the value of irrigation was a big compensation for the failure elsewhere, as Victoria still has available wide areas of irrigable land, and further supplies of water which can be conserved. The appreciation of irrigation was shown by the fact that even before the season closed there was a rush for the possession of the watered lands still in the possession of the Government.

Queensland.-Major Sir Hamilton Goold-Adams succeeded Sir William MacGregor as Governor. Queensland enjoyed a remarkably good season, quite escaping the shortage of rainfall in the South. The pastoral industry was particularly prosperous, and as the war enhanced wool values and promised also to increase the price of meat, the State never had a brighter financial aspect. Early in the year, Mr. Denham, the Premier, visited England, where he arranged for the conversion of maturing loans, and was gratified at the confidence the London money market displayed about Queensland's national assets. During the year no less than 9,000,000 acres of land were taken up by new settlers, an increase of 2,000,000 acres over the previous year. Nearly 4,000,000 bushels of maize were raised, and the sugar product reached 2,420,000 tons. Altogether the outlook in the big tropical State could scarcely be brighter.

South Australia, like Victoria, was seriously affected by the drought, and the wheat crop, which is so important in the State, was very light indeed, while many settlers had great trouble to avert serious losses among their live-stock. Sir Lionel Galway succeeded Sir Day Bosanquet as Governor. Mr. A. A. Kirkpatrick retired from the position of Agent-General in London after some years of successful work, and was followed in that position by Mr. F. W. Young. The Treasurer, Mr. Peake, in his Budget Speech in October, estimated a surplus of 4,000l., and indicated that should there be a deficit in consequence of the drought and the war, it need cause no concern, as there was on hand an accrued surplus from the recent good years of upwards of 1,000,000l. As in New South Wales, Victoria, and Western Australia, there was every indication of farmers extending their wheat areas in the ensuing year in anticipation of high prices.

Western Australia.-A general election in October resulted

in Labour being again returned to office. Mr. Scaddan again became Premier, Treasurer, and Minister for Railways; Mr. Collins, Minister for Mines and Water; Mr. Joseph, Minister for Lands; Mr. Walker, Attorney-General and Minister for Education; Mr. Drew, Colonial Secretary; Mr. Angwin, Minister for Public Works; Mr. Jabez Dodd and Mr. R. H. Underwood, Honorary Ministers. Nearly 300 miles of new State-owned railways were opened for traffic in December, and at the same time there was a similar length in course of construction. In every direction the Government pursued an active policy of development works. Western Australia has an area of nearly 1,000,000 square miles, and at present the population is only a little more than 300,000. The season was against agricultural production, and the wheat crop was only a little above one-third of that of the previous year, when it reached 13,500,000 bushels. As a rule, however, Western Australia enjoys a very regular rainfall, and the settlers, undeterred by the set-back, pushed on vigorously with their clearing and other pioneering. Mr. Justice McMillan was appointed Chief Justice in succession to Sir Henry Parker, and the Very Rev. Cyril Golding Bird, Dean of Newcastle, was consecrated Bishop of Kalgoorlie.

Tasmania enjoyed a fairly good season. Substantial headway was made in production, especially in orcharding, which industry continues to thrive because of the keen demand which awaits its produce in the United Kingdom, and other parts of the Old World. There was keen political fighting, in consequence of the rival parties being almost equal in strength. The Liberals under Mr. Solomon were defeated in the Legislative Assembly by one vote in April on a No-Confidence motion by Mr. Earle, the Labour leader. Mr. Solomon asked for a dissolution, which was refused by the Governor, and he then resigned in favour of Mr. Earle, who formed a Cabinet as follows: Prime Minister and Minister for Justice, Mr. Earle; Chief Secretary and Minister for Mines and Labour, Mr. Ogden; Minister for Lands, Public Works, and Agriculture, Mr. Belton; Treasurer and Minister for Education and Railways, Mr. Lyons; Mr. Justice Nicholls became Chief Justice in succession to the late Sir John Dodds; and the Very Rev. R. Stephen, Dean of Melbourne, was consecrated Bishop of Tasmania.

Northern Territory and Papua.-Interest in the development of these two great new possessions was largely suspended on the outbreak of war. The failure of the first attempt of the Federal Government to settle the Northern Territory in small areas has not yet been succeeded by any new scheme. It is now generally

recognised that there will be very little farm settlement until the country is better served with railways and marketing facilities. Towards this end railway construction was proceeded with upon a small scale, and the proposal to connect the Territory by an overland line with Southern Australia was farther advanced.

It is now fairly certain that this railway will be constructed in the course of a few years. The few stock owners who now occupy the richest portions of the country with great grazing stations were favoured as usual by a good rainfall and abundant pastures. Some of these pastoralists possess from 35,000 to 70,000 head of cattle, and with meat at its present price they are enjoying excellent returns.

In Papua the proximity to German territory caused much excitement among the new planters, although between the German and the Australian settlements there lies a wide and almost impassable area, made up of mountain and tropical jungle. Considerable stretches of land were cleared and added to the area under cultivation, and a number of the settlements are now approaching the period of productivity. The Administration continued its well-established policy of dealing generously with the settlers, and kindly but firmly with the natives; indeed the colonisation of British Papua, so far as it has gone, is proving an interesting exception to most of the settlement in Australasia, inasmuch as good feeling is being maintained with the natives, while substantial headway is being made with the pioneering. The commencement of railway buildings gave a new note of civilisation to this grand tropical domain.

II. NEW ZEALAND.

Up to the outbreak of war New Zealand was passing through one of the most satisfactory years in its history. For instance, Customs returns had never been so high as during the six months which ended in June, while the Minister for Finance was able to announce a surplus of 427,0007. The overflowing Treasury encouraged the Government to grant still easier terms to new settlers, so as to bring the possession of farms within the reach of farmers' sons and industrious labourers who had accumulated savings. The construction of new railways and other public works was actively promoted. An interesting political event was the reentry of Sir Joseph Ward into party leadership. He attempted in July to oust the Government on a No-confidence vote, but the Cabinet retained office by a fair majority. The general elections were held in December, and the new Parliament found parties equally divided, the Government having forty seats, and the same number being held by the Opposition, comprised of the Liberals and Labour members. In December, Mr. Fisher, the Prime Minister of the Commonwealth, visited the New Zealand Dominion, and conferred with the Government upon Imperial Defence, so far as it affected the two Dominions, and the question of a reciprocal commercial agreement. Mr. Fisher thought (and this opinion was heartily endorsed by the great majority of the people of New Zealand and Australia) it would be unwise to build too confidently upon a long era of peace at the conclusion of the present war. He urged that Australia and New Zealand should make it clear