Note Footnote b: — Chapter III

The ex-Premier did not leave the colony abruptly, however, on handing over, on the 1st of February, 1866, all ministerial responsibilities to Mr. Arthur Macalister, his senior colleague in the Cabinet. He occupied his seat for nearly six months, in fact, and conducted himself with native dignity and becoming self-effacement as an unofficial member of the Assembly. Unhappily he was not to leave Australia without having a wholly unexpected shadow suddenly cast over his long administration of affairs. In mid-July the news reached the colony of the catastrophic failure of the Agra and Masterman's Bank, which had undertaken to finance the Queensland railway loan then being rapidly spent. The financial crisis of 1866 played havoc in London; it was of crushing effect in Queensland, for the Treasurer could not meet his obligations, and the railway workmen threatened a riot in consequence of non-payment of their hard-earned wages. In this emergency, Parliament being in session, the Treasurer, Mr. (afterwards Sir) Joshua Peter Bell desired to adopt the recent American expedient of issuing an inconvertible paper currency. The Cabinet approved, but on the Governor being consulted before the introduction of the bill he emphatically declined to promise the Royal assent to the measure, if passed. This he did for the all-sufficient reason that his Imperial instructions compelled him to reserve the assent to all measures affecting the currency. Ministers immediately resigned, and the Governor became the victim of irrational public obloquy for a time.b Mr. Herbert consented to lead a stop-gap Administration, and under his guidance a bill was at once passed empowering the Government to raise £300,000 by the issue of Treasury bills bearing not more than 10 per cent. interest per annum. They were forthwith disposed of at a premium, and the credit of the Government was restored. The temporary Government then resigned, and Mr. Macalister resumed office. Thus Queensland was saved from the double peril of paralysed credit and a debased paper currency.