The years following the war had, however, not been altogether prosperous; a great outbreak of speculation was followed in 1873 by a serious commercial crisis.

And since that year there had been a permanent decrease in the Imperial receipts.

This was, for political reasons, a serious inconvenience.

By the arrangement made in 1866 the proceeds of the customs and of the indirect taxation (with some exceptions) were paid into the Exchequer of the Federation, and afterwards of the Empire.

If the receipts from these sources were not sufficient to meet the Imperial requirements, the deficit had to be made up by contributions paid (in proportion to their population) by the separate States.