best possible financial assistance for the territories which dominated their attention. The Treasury, on the other hand, necessarily regarded the requirements of the dependencies as but one of many pressing financial demands upon the limited resources of the Imperial Exchequer. Given the state of the imperial budget, the burden of the national debt and high taxation, and in view of the external popular and political pressures for economy, the Treasury’s difficulties become apparent. If the necessity for reducing Imperial government expenditure is assumed, then very convincing reasons had to be presented to justify waiving debts to the Imperial Exchequer and increasing imperial expenditure. Only the argument of avoiding the burden of grants-in-aid convinced the Treasury at this time. In the next chapter we must consider how altered circumstances presented the Colonial Office with a new lever with which to open the imperial purse.