When Mr. Philp took charge of the Treasury in March, 1898, the credit of the colony appeared to have been fully restored. True, the funded public debt had grown to 331/2 millions, but the population had also increased to 484,700, so that the public debt proper was slightly more than L69 per head. The year 1897-8 closed with the small surplus of L20,724 at the Treasury, and revenue was steadily improving. In June, 1899, Mr. Philp had the largest surplus realised for seventeen years, nearly L150,000, but then an era of drought began. Still revenue continued to advance until the establishment of federation in 1901, when financial trouble was accentuated. The year 1899-1900 had shown a small surplus of L47,789, to be followed by three successive deficits aggregating L1,151,469. Mr. Philp, an old colonist, an experienced business man, and with a full knowledge of its varied resources, had unbounded confidence in the future of the State. Soon after he became Premier at the close of 1899, he essayed a bold public works policy, and during his first three years of office he induced Parliament to sanction the borrowing of nearly 71/2 millions sterling. But he did not issue the whole of the last 21/4 millions. Owing principally to the South African war, colonial stocks were not high in favour in 1900, and the Queensland Government, acting on the best advice, decided to call for tenders for the L1,400,000 of 3 per cent. stock placed on the English money market in July of that year. The loan only realised L91 5s. 11/2d. per cent., about the same price that was obtained by New South Wales and West Australia in the same year. Of the balance of the loan, L900,000 was taken up in Queensland by the trustees of the Government Savings Bank at L97 per cent., and L46,600, sold locally and bearing 31/2 per cent. interest, realised L99 10s. 81/4d. net, the local market not being affected by the adverse influences and the choice of investments which operated in London. In October, 1901, for L1,374,213 offered in London at 3 per cent., the extremely low price of L88 12s. 4d. was obtained; and in 1903, when the then Treasurer (Mr. T. B. Cribb) again sought to enter the London market with 31/2 per cent. stock, he could only place L750,000 worth at the low rate of L92 19s. 113/4d. Times had indeed changed, and for the moment the State was practically excluded from the London money market. The balance of the loan has been, and is being, issued in Queensland, about L456,000 being still unsold.