Borrowing and business in Australia

Bibliographic data

Monograph

Identifikator:: 183051623X

URN:: urn:nbn:de:zbw-retromon-222122

Document type:: Monograph

Author:: Wood, Gordon L. http://d-nb.info/gnd/1239193688

Title:: Borrowing and business in Australia

Place of publication:: London

Publisher:: Oxford university press, H. Milford

Year of publication:: 1930

Scope:: xv, 267 Seiten; graph. Darst.

Digitisation:: 2022

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part III. The boom of 1890 and its economic consequences

Collection:: Economics Books

OVERSEAS TRADE AFTER 1890 95 the situation does lend some colour to the belief that the banks were largely responsible for undue expansion of credit in con- nexion with land transactions; and this is to be observed in the excessive advances. The Australian practice in the matter of granting overdrafts, and the customary use of cheques, readily lent themselves to an inflation of this type. The relatively low level of the ratio of reserves to deposits is a reliable indica- tion that the superstructure of credit was expanding at a faster rate than the growth of the gold basis warranted. The effect of excessive capital importation upon gold move- ments has also a particular bearing upon the matter under discussion. Theory would predict that the normal flow of gold from Australia to Britain, which was a consequence of Australia’s Tare XVII Stocks, Production and Movement of Gold! (In Millions of Pounds Sterling) Year. 1886 1887 [888 889 £890 1891 1892 1893 1894 18956 i896 . Stocks. | Production. | Export. 81-53 86-09 94-89 97-60 102-92 103-16 103-37 100-13 89-99 39-39 21-90 4-5 4-8 4-8 5-9 5-3 5-3 6-0 6-2 6 76 7.8 2-020 1-367 £507 4-456 3-730 5-108 3-696 1-956 4-161 4-407 5-091 Gold retained. 2-568 3-568 0-411 1-436 1-474 0-295 2-628 4-632 3-006 2-516 2.017 position as a gold producer, would be retarded; and that an abnormal proportion of the gold yield would be retained in the country. Not all of the capital introduced into Australia could come in the form of commodities; part took the form of an increase in reserves, since some of the gold that would normally have been exported was retained. In addition, a very large pro- portion of the loans was diverted to Australia from other fields of investment, and for no other purpose than that of speculation in land. We can expect, therefore, to trace the effect of capital importation in retarded gold movement, as well as in a tendency for the ratio of imports to exports to increase; and the figures L Coghlan, Statistical Account of Australia and New Zealand, Reports of the Royal Mint, and Commonwealth Bureau of Census and Statistics, Finance Bulletin No. 11.

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