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1870 Mr. Doyne, C.E., and in 1873 Mr. Wardell, reported on these questions. It was finally considered impracticable to seek to burst the mouth of the Swan. In 1870 Surveyor Cowle and Captain Croke took soundings in Gage's Roads. A few years later the various plans for harbour improvements were submitted to Sir John Coode, the eminent expert. Various public works, besides those mentioned, were put in hand in 1869-78.

Governor Weld, early in his term of office, experienced some difficulty in balancing revenue and expenditure, and upon occasion had to announce a deficit. Notwithstanding the loans, representative institutions, and an export trade—which was doubled during the ten years 1869-78—bad seasons and diminishing convict expenditure greatly curtailed the revenue. Governor Hampton left a balance in the colonial chest of £22,475, and Acting Governor Bruce increased this amount to £25,052. In 1870 the pastoral industry suffered extensively from a drought, which caused considerable death in stock and a decrease in the wool yield. Agriculturists were also keenly affected, and in the Victoria and eastern districts particularly their losses were great. After the red rust scourge of 1868 these low returns in the Victoria district occasioned general distress. Thus in his first year of office Governor Weld was seriously assailed by monetary difficulties. While the colonial revenue in 1869 was £88,651, in 1870 it had fallen to £82,960; in the same years the expenditure had risen from £103,124 to £113,046. The Imperial grant-in-aid of about £15,000 did not make up the deficiency. The occasion called for retrenchment on the part of the Governor—a very unpopular necessity. At the same time pauperism became most serious, especially among the thriftless convict class which had been freed. In 1871 the colonial revenue was £1,000 lower than in 1870, but the expenditure was now reduced to £107,147. The Imperial convict expenditure fell from £107,023 in 1869 to £92,473 in 1871. Nor was the condition of the Victoria district improved; red rust was succeeded by drought, which was followed again by red rust, and consummated in February, 1872, by a hurricane and rains and floods, damaging property, as well of the Government as private people.

The decreasing numbers of convicts under the Convict Establishment caused Governor Weld in 1872 to close the country depots and call in to Fremantle nearly all the men on public works. The outcry concerning this order was loud in the districts affected, and the Governor was accused of being the tool of the Secretary for the Colonies, and was twitted with having as his special mission the reduction of imperial expenditure. An aftermath of convictism was being felt, and when the glamour of an increasing population and of the introduction of outside capital was disappearing, the sores became only too apparent. In 1871 there were estimated to be between 700 and 800 aged ex-convicts in Western Australia who were a charge on the public purse, and £3,711 was disbursed in charitable allowances to them. A pitiful and even disgusting poverty was to be observed among these people. A public meeting held in Perth on 17th April, 1872, considered that Her Majesty's Government should "relieve a young and struggling community" from the keep of these infirm paupers, and asked that provision be made for their maintenance. In 1872 the maintenance of hospitals, gaols, and poor houses absorbed nearly nine per cent. of the revenue.

In that year, despite another visitation of red rust in the Victoria district, and other losses, the revenue more than balanced the expenditure. By economy the Governor had reduced the expenditure to £98,248, while the colonial revenue had increased to £89,976, which, with the Imperial grant-in-aid of £15,324, made a total of £105,300—a surplus of seven thousand odd pounds. The position in 1873 was still better. In his address to the Legislative Council in June, 1873, Governor Weld thus hopefully referred to the position:—"I am able to tell you that the revenue of this colony is in a very flourishing condition, that the exports and imports are now greater than at any period of its existence, that the financial position of the mercantile community is sound, that the value of land in many places has greatly risen, that the amount on deposit in the Savings Bank is on the increase; and that these results are the true tests of progress, for they have gone side by side with a large reduction in Imperial expenditure, and in despite of the general failure of the wheat crop from red rust, a calamity by which very heavy loss has fallen on the colony and much hardship has been entailed upon individuals, especially in the Victoria district—drawbacks which far outweigh the impulse which has been afforded by the expenditure of a small loan for public works."

The revenue in 1873, with the grant in aid of £14,107, was £134,831, and the expenditure £114,269. For this increase in revenue the Customs were chiefly answerable, aggregating £69,329, against £45,876 in 1871. A protective tariff to some extent caused the inflation. In 1874 the revenue with the Imperial grant reached £148,072; in 1875, £157,775; in 1876, £162,189; in 1877, £165,412; and in 1878, £163,343. Among other direct sources of revenue was the control which the Government held of the guano deposits, which in 1877 returned £7,534, and in 1878, £13,869. But the expenditure in these later years increased out of proportion to the revenue, the main reason being the application of fairly large sums out of the revenue to public works, in addition to the loan fund moneys so used. From 1875 to 1878, the expenditure outbalanced the revenue—in 1875, by £11,455; in 1876, by £17,295; in 1877, by £17,547; and in 1878, by £34,839. Add to these amounts the sum averaging about £15,000 received from the British Parliamentary grant, and the disparity will look still more serious, and the demands of colonists for Responsible Government in view of the necessary contingencies imposed by the Imperial Government will bear a different light. A cry of depression was again heard through the colony.

All this while the Imperial expenditure in the convict department had been falling off. In 1869 it was £107,023; in 1875, £78,759; and in 1878 only £57,210—a drop of nearly £50,000. Indeed, to this diminution of Imperial expenditure was largely due the increase in colonial expenditure; the calls for a large Government outlay to foster and facilitate expanding industries and protect a heterogenous population necessarily increased annually. From 1850 to 1870 the Imperial Government spent £1,932,850 9s. 2d. in the colony. The total Imperial and colonial expenditure in 1869 was £210,147, and in 1878 £255,453. The increase is not so great as the expansion and state calls demanded, and consequently depression was the more keen, because by the scattered nature of the community its varied interests required a heavier expenditure than even a larger population within accessible distances. The progressive decrease in convict expenditure necessitated a proportionate increase in colonial expenditure, therefore the constant withdrawal of so much outside capital was bound to cause distress—the convict expenditure of £100,000 a year was better than a loan; it demanded no interest and the people did not hypothecate their property.

A vexed question between the Imperial Government and colonists was the proportion which the Imperial authorities should pay towards the maintenance of the police and magistrates. In