Since times began to improve throughout Australia, the Federal burden has been less in evidence; and at the late Melbourne Conference, held to confer with the Commonwealth Government with the view to adjust mutual relations, no State Premier recognised more frankly than did Mr. Kidston the claims of the Federal Government to increased revenue to defray the cost of old-age pensions, naval and military defence, and other great national objects. The provisional agreement entered into by the Conference was recognised by all the Premiers as less advantageous than they had desired, but they were unanimous in admitting that under the altered conditions it was the best they could now hope for. On the Commonwealth side it was recognised that the States had made a large voluntary surrender, and that the position of the Federal Treasury would be greatly strengthened under the operation of the agreement. The apparent dread of diminishing Customs revenue in after years was clearly not well founded, because the Commonwealth Parliament can easily, by readjustment of duties, make up any deficiency. On the other hand, an immense advantage will be gained by both parties to the agreement from the separation of Federal and State finances except in respect of the liability of the Commonwealth to hand over, and the right of the States to receive, a fixed annual contribution of 25s. per head of the population. The representatives of the States granted a further concession to the Commonwealth by permitting the retention of an additional L600,000 of the Customs revenue for the current year to reimburse the cost of old-age pensions not already provided for by the Commonwealth Trust Fund created by the Surplus Revenue Act of 1908. The bill embodying the agreement received the approval of the statutory majority in both Houses of Parliament. It now rests with the electors of the Commonwealth to accept or reject the necessary amendment of the Constitution; and there is every reason to hope that the compact will be made as permanent as any other part of the Constitution. In that event, the relations between Commonwealth and States will undoubtedly improve, and harmonious co-operation for the public welfare may be safely anticipated from the Parliaments. The Federal session of 1909 has been distinguished by the passage of epoch-making bills for the appointment of a High Commissioner in London and for naval and military defence, measures which are calculated to raise the Commonwealth to an exalted position in the scale of young nations. [Illustration: QUEENSLAND 1859] [Illustration: QUEENSLAND 1909] [Illustration: AUSTRALIA 1859 SHOWING SELF-GOVERNING COLONIES] [Illustration: THE WORLD Showing relative position of AUSTRALIA.] PART IV.--THE PRIMARY INDUSTRIES. CHAPTER I. THE PASTORAL INDUSTRY.