PART V 
AUSTRALIA DURING AND AFTER THE 
GREAT WAR 
CHAPTER XIII 
BANKING AND BORROWING POLICIES IN 
AUSTRALIA DURING THE WAR 
‘Tt is not enough to say that the abnormal events of the war and post-war periods 
are responsible for the bad times entered upon in the middle of 1921. The general 
affect of these events was to impoverish us, but for many years there was a great 
outward show of increasing wealth.” —Prof. D. B. COPLAND, The Trade Depression 
in Australia. Paper before Section G of A.A.A.S. 1923. 
‘In ascending periods Britain exports largely on credit. Her area is so small 
relatively to her capital—it is, go to speak, so nearly saturated with capital—as to 
allow scope for any new enterprise that holds out prospects of high return. Conse- 
guently the activity of her industries depends in an exceptional degree on the con- 
fidence and strength of business enterprises in other countries, and especially in 
new countries. That confidence is sometimes misplaced. But so long as it lasts 
capital flows from her for investment abroad and especially in new countries; and 
the only way in which this flow can be effected is by a net increase of exports, visible 
and invisible; that is by making aggregate exports larger, relatively to imports, 
than they would otherwise have been. Of course there is no necessary connexion 
between increased investment of British capital in any particular country and an 
increase of her exports to that country.’ —ALFRED MARSHALL, Money. Credit, and 
Domanerce. 
[1 is not proposed to examine the period between 1914 and 1919 
at any great length, paradoxically enough because of its extra- 
ordinary character. While it is doubtless true that it is quite 
unjustifiable to wrench that period from our analysis, and to 
disregard the momentous developments in every phase of our 
national life that occurred within those years, it is equally true 
that the conditions of the time were too abnormal to bear 
examination, in an economic sense, except as a period of great 
national emergency which justified as expedient in practice so 
much that was unsound in theory. Our purpose would be served, 
therefore, if the chief threads were gathered together, and an 
endeavour made to weave some picture of the war years which 
would serve to fill a gap in the ambitious panorama we are 
attempting to portray. But, actually, no specific survey of the 
period is believed to be necessary. It can be demonstrated for