in January 1874 becoming Secretary for Public Works and Mines. He resigned from these posts in October of that year. The government of John Douglas was defeated in 1879 after a series of severe droughts and McIlwraith became premier for the first time. He quickly worked to ameliorate the colony's finances and with the assistance of a return of agricultural prosperity he turned the budget deficit into a surplus. Queensland at this stage was seeing increasing numbers of immigrants and McIlwraith oversaw the colony's economic development. The McIlwraith government introduced the divisional system of local government to the larger part of Queensland and assisted in establishing a postal service through the Torres Strait Islands. In 1882 he was knighted. The Australian colonies were extremely anxious about German colonial activities in the region, it became clear that the German government was planning to annex eastern New Guinea, to Queensland's north. McIlwraith took the extraordinary step of attempting to annex New Guinea for Queensland; he employed Henry Chester to proclaim the Queen's sovereignty which occurred on 4 April 1883. This was later disallowed by the British Secretary of State for the Colonies, Lord Derby on the basis that a colonial government had no authority to annex other colonies. Indignation at this apparent slight to colonial prerogatives incited the gathering of an Intercolonial Convention in November and December 1883, with federation and annexation on its agenda. This proved to be a first step in the federation movement, and more quickly resulted in the establishment in 1884 of the Federal Council of Australasia. Orders were eventually given to establish British New Guinea as a protectorate on the southern coast of the eastern coast of New Guinea on 6 November 1884. However, a well-informed German Navy had secretly landed, annexing the northern coast under the name ‘Kaiser-Wilhelmsland’ three days earlier. News about German New Guinea was successfully kept a secret until it finally broke on 22 December that year. The following day an irate McIlwraith told the Queensland parliament that British conduct in this affair constituted "the grossest piece of treachery on the part of the English government to the colonies that has ever been perpetrated". In 1883 a government proposal to raise funds for the construction of a transcontinental railway line by a system of land grants was attacked for corruption in allocation of grants. McIlwraith lost office to his rival, Samuel Griffith, in