IN RELATION TO PUBLIC BORROWING 179 
source. The value of plant and machinery sunk in factory 
equipment in Australia was approximately £65 millions in 1913; 
and this had risen to £120 millions by 1928, an increase of 84 
per cent. Again, Knibbs, in his estimate of private wealth 
made for 1915, reckoned the value of all private capital repre- 
sented by plant and machinery in mines and factories at 
£116 millions. The corresponding estimate made by Wickens 
for 1925 was £203 millions. which represents an increase of 76 
per cent.} 
The supply of land available for agricultural and pastoral 
purposes, on the other hand, remained relatively constant; and 
governmental efforts to open up new territory were made at 
great cost with returns that were by no means commensurate. 
A very considerable intensification of the demand for urban 
land, which assumed all the characteristics of a land boom, took 
place between 1915 and 1920. Extensive subdivision and build- 
ing schemes were developed in all the capital cities. Expansive 
government schemes for building homes for returned soldiers, 
together with an extension of the existing schemes for financing 
home building through State banks, increased the pressure upon 
urban residential sites ; and this was reflected in an abrupt rise 
in rents. An even more remarkable boom in the value of city 
sites occurred ; and this affected every town of importance in 
the Commonwealth. Prices were obtained for city blocks which 
had not been approached since 1893; and an extraordinary 
outburst which took the form of great activity in rebuilding of 
city premises was common to all the capital cities. tis obvious 
that this alteration in the relative importance of the different 
factors in production would have considerable effect in vary- 
ing both the respective rates of return to those factors and the 
distribution of income in Australia. 
Now changes in the relative demand, where there exists such 
extreme variation in the elasticity of supply as between the 
different factors, could only mean an advantage which would 
be graduated between the factors according to their elasticity 
of supply. Under the conditions which have been outlined for 
the period this would lead us to expect a marked rise in the 
retirn +a land a rise less marked in the return to labour: and. 
! See comparisons of Australian private wealth at different periods, Common- 
wealth Year Book. No. 21, p. 436.