THE COMMONWEALTH, 1900-14 109 
competition for the limited supplies of available capital. The 
marked credit stringency which ensued was an additional factor 
in forcing on economy in the community; and was directly 
responsible for the movement towards .the consolidation of 
state debts which occupied the attention of treasurers for some 
years. It was likewise the thin end of the wedge of financial 
control by the Federal Government. This control became 
stronger in later years when expanding revenues doubled and 
redoubled the Federal Government’s power to assist financially 
embarrassed state governments. 
The recovery both in Britain and in Australia during 1905 
must be regarded as astonishing in its rapidity and completeness. 
In London the large blocks of securities that had been created 
since 1900 and had glutted the market ever since were gradually 
absorbed ; and, by the end of 1904, the market was again ready 
to entertain fresh applications. In the first quarter money rates 
became distinctly easier, and exchange quotations showed a 
rising tendency. This state of affairs was immediately reflected 
in the Australian financial situation; but the real prelude to 
complete recovery in the Commonwealth came in the form of 
splendid rains in all states. The wonderfully quick return to 
prosperous conditions after the dry seasons afforded a remark- 
able demonstration of the recuperative powers of the country. 
The end of the year saw the export trade in a flourishing con- 
dition, but with imports still on a very moderate scale. 
Partly as a consequence of the greatly increased rural 
productivity, partly as a result of the general rise in world 
prices which was now becoming marked, and partly, also, as 
the normal rebound from depression, Australian stocks now 
found more favour in the eyes of investors than for years past. 
The slow net increase of population, 1-5 per cent. for the year, 
the shrunken stream of immigration, and the lack of enterprise 
attested by the increase in fixed deposits, indicated, however, 
the lingering effects of the recession period. Nevertheless, the 
bank and mercantile position was in general quietly sound and 
moderately prosperous already; and the non-success of the 
Western Australian loan towards the end of the year was not 
in any way a reaction, but was probably due to political un- 
certainty in England, and to the feeling among investors that 
the prosperity of that state was too uncertainly poised upon