Queensland began its career with a bank overdraft, for with "71/2d. in the Treasury" on the date of the Queen's proclamation of the colony it was necessary to provide funds in anticipation of revenue collections. But at the outset borrowing was indulged in on a modest scale. For 1860 the revenue was L178,589, and the deficit only L1,514. For the second year there was a revenue surplus of L2,442 over the expenditure of L235,796. But there had been during the period an outlay of L63,210 on loan account. Besides this, of the total revenue for the two-year period--including the twenty-one days of 1859--the cash receipts from land sales, which strict political economists hold to be capital, were L114,803, equal to 27 per cent. of the total revenue. It may be assumed that the loan expenditure was entirely for permanent or reproductive works; but only 73 per cent. of the money spent for the service of the year was strictly revenue, the remainder arising from land sales. Yet as New South Wales practice had lent sanction to the use of land sales receipts as revenue, the Treasurer (Mr. R. R. Mackenzie) may be admitted to have managed well, since at the outset the estimates of revenue and expenditure were both wholly conjectural. Mr. Mackenzie's successors were less fortunate; for during the first decade, although the annual revenue had quadrupled, there were only two years with surpluses. There was another scarcely defensible transaction during the first ten years' term. In 1864 the Treasurer, finding he would otherwise have a relatively heavy deficit, balanced his budget by transferring from Loan Fund to Revenue the total expenditure incurred upon immigration since the foundation of the colony. In that year the loan outlay was L401,421, including the transfer to revenue, an increase of L337,950 in a single year. Thus the loan expenditure was at the rate of about L5 10s. per head of the population as ascertained by the census of the year. The deficit of 1864 seems less excusable because the revenue had increased by over 25 per cent. for the year. The incident illustrates the danger of suddenly increasing loan expenditure, which produces industrial and commercial activity, but at once adds to the cost of public administration in various ways. Loan money spent on the same scale per capita in Queensland to-day as in 1864 would mean a total sum of about L3,000,000 a year, whereas, even with the numerous railways lately started, the loan disbursements for 1908-9 did not quite reach 11/4 millions. Another consideration is that up to 1865 none of the loan works had become reproductive, and the 211/4 miles of railway then open for traffic did not earn working expenses. Further, the Government had been borrowing at 6 per cent. interest, which meant that the 11/4 millions of loan indebtedness at the end of 1865 imposed a burden upon the taxpayers of about L75,000 a year, or not far from L1 per head of the population.