394 THE FEDERATIONS AND THE UNION [PART IV 
far from yet being finally settled in 1911, and it was proposed 
that they should be set off against the amount of the state 
debt if and when the Commonwealth decides to take over 
the debts which it now can do at any time to their full 
extent under the Act No. 3 of 1910.1 The states are, however, 
now demanding payment forthwith with 3} per cent. interest. 
Then follow the provisions for the question of customs and 
excise — 
86. On the establishment of the Commonwealth, the 
collection and control of duties of customs and of excise, and 
the control of the payment of bounties, shall pass to the 
Executive Government of the Commonwealth. 
87. During a period of ten years after the establishment 
of the Commonwealth and thereafter until the Parliament 
otherwise provides, of the net revenue of the Commonwealth 
from duties of customs and of excise not more than one- 
fourth shall be applied annually by the Commonwealth 
towards its expenditure. 
The balance shall, in accordance with this Constitution, 
be paid to the several states, or applied towards the payment 
of interest on debts of the several states taken over by the 
Commonwealth. 
88. Uniform duties of customs shall be imposed within 
two years after the establishment of the Commonwealth. 
89. Until the imposition of uniform duties of customs— 
(i) The Commonwealth shall credit to each state the 
revenues collected therein by the Commonwealth. 
(ii) The Commonwealth shall debit to each state— 
(a) The expenditure therein of the Commonwealth 
incurred solely for the maintenance or continuance, as at the 
time of transfer, of any department transferred from the 
state to the Commonwealth ; 
(6) The proportion of the state, according to the 
number of its people. in the other expenditure of the Common- 
wealth. 
(iii) The Commonwealth shall pay to each state month by 
month the balance (if anv) in favour of the state. 
* Cf. Harrison Moore, op. cit., pp. 528-48; Mr. T. G. Watson’s Notes 
on the Financial Problems of the Commonwealth and the States in Victoria 
Parl. Pap., 1907, No. 5. The cost of federation is given in Commonwealth 
Parl. Pap., 1910, No. 62, and a paper on the comparative cost to the lesser 
states in Tasmania Parl, Pap., 1910, No. 50.