Full text: Borrowing and business in Australia

In the state of things outlined above we should expect goods 
imported into Australia to fall in price, and we should further 
expect a greater fall in the prices for imported than for domestic 
commodities or exported goods. Taking the indices for the chief 
domestic groups, viz. Meat and Dairy Produce, we find a recorded 
fall from 2,296 to 2,083 or a decline of 9 per cent. over the whole 
period. The prices for the three main export groups, viz. Wool, 
Agricultural Produce, and Metals, fell from 4,027 to 3,453 or 
15 per cent. over all. The three typical import groups consisting 
of Textiles and Leather, Chemicals and Groceries (tea, sugar, 
soffee, tobacco, and kerosene), fell from 4,139 to 3,242 ora fall 
of 22 per cent. over the three groups.! After 1890, however, the 
normal trends of the borrowing cycle are masked by the pheno- 
menal fall in prices for primary products and by the spread of 
a world crisis purely monetary in origin. The harmonizing of 
Coghlan’s import and export indices (Fig. VI) with Knibbs’ group 
prices, therefore, proved too difficult a task. 
Money rates of wages, however, present the best single index 
of trade movements adverse to the prosperity of any com- 
munity. It is unfortunate for the purposes of this analysis that 
no index of wages had been compiled for the years prior to 1901 ; 
and this constituted a serious difficulty in estimating the effects 
of trade movements upon welfare. Further, an index of wages 
was indispensable if the scheme devised by Taussig was to be 
applied with any prospect of success, and the rather trouble- 
some feat of reconstructing the data had to be attempted. The 
result, however, abundantly justified the effort; and the com- 
pleted statistical picture closely supports the conclusions reached 
by investigators for other countries. At the risk of becoming 
wearisome, therefore, it will be necessary to indicate as briefly 
as possible the steps. by means of which an index of wages was 
constructed for the years covered by our period. 
Nominal wages offered very little difficulty. The statistical 
registers of the various colonies contain continuous and reliable 
series of wage rates for the more important types of labour ; and 
the result accords closely with the remembered experience of 
wage movements during those years. Retail prices for Sydney 
* Knibbs, Prices, Price Indexes, and Cost of Living in Australia; Commonwealth 
Bureau of Census and Statistics, Labour Report No. 1, especially Appendix II 
containing an invaluable and extensive series of current retail prices and annual 
wholesale prices.

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