The year 1899-1900, from the revenue standpoint, was the record year of the century. Wool brought extremely high prices in London, and loan expenditure had been maintained during the previous two years at an average of a little over L1,000,000 per annum. For the next year, one-half of which was subsequent to the proclamation of the Commonwealth, revenue showed a decline of nearly half a million sterling, although loan outlay had been increased rather than lessened. Two reasons could be assigned for this shrinkage--a bad season in the West, and the dislocation of accounts resulting from federation. Still, in 1899-1900, the expenditure from revenue was fully maintained, with the result that on 30th June, 1901, the deficit exceeded half a million. In the next year, 1901-2, there was a further decline of about half a million in revenue, arising (1) from one-fourth of the State's Customs revenue and the whole of its postal revenue being retained by the Commonwealth, and (2) from the sparse rainfall and the heavy drop in London wool prices. Thus, although the apparent expenditure showed a decline of about L650,000 due to the cost of the transferred departments being defrayed by the Commonwealth, the financial year ended with a deficit of L431,940. The year 1902 was the most disastrous with respect to rainfall that Australia ever experienced, and the drought struck Queensland with cruel intensity. The revenue of 1902-3 was maintained at nearly the level of the previous year, good rains having fallen early in 1903, while the expenditure was cut down by about a quarter of a million; yet there was a further deficit of L191,341, despite the fact that an income tax had been imposed and a Public Service Special Retrenchment Act passed which resulted in a saving of L87,000. The Philp regime practically ended with an accumulated deficit, as above mentioned, of L1,151,469; for, about two months after the close of the financial year 1902-3, the Ministry were compelled by a schism in their party to resign office. They had been long popularly stigmatised as the "Continuous Government." The work of the coalition of 1890 having been accomplished, Ministers had exhausted their popularity; yet the probability is that but for the financial debacle the end would not have come quite so soon. The drought having by this time broken, a return of prosperity was naturally expected; but on the one hand Ministers had made enemies by severe retrenchment, and on the other hand they were blamed for having failed to balance their budget.