108 THE COMMONWEALTH, 1900-14 
the part of the London market. Business, in the eastern states 
especially, was almost brought to a standstill by the sudden 
constriction of credit which developed ; although even harassed 
state treasurers were able to appreciate the salutary nature of 
the check.! That the drying of the stream of loans was due to a 
loss of confidence in Australia as a field of investment, as well as 
to inability on the part of the Britishinvestor to lend, isindicated 
by the fall in Australian government stocks at this time.2 Nor 
were the difficulties eased by the disfavour with which advanced 
Australian legislation was being viewed in Britain. 
Hardening money rates, dullness in trade, stationary bank 
figures, stagnation in industry, diminished customs revenue and 
imports, declining immigration and a crop of business failures 
were the outstanding characteristics of 1904, a year which 
exhibited all the features of the recession stage of the cycle. 
The increased strain thrown upon the productive activities of 
the country is reflected in an expansion of exports by nearly 
£91 millions, while economy is indicated by the decline of 
nearly £2 millions in imports. The excess of exports over 
imports increased from nearly £11 millions in 1903 to nearly 
£20} millions in 1904, a feature that indicates the strength of 
the community effort made under steady financial pressure. 
The year is distinguished, too, by the decline in loan issues, in 
fact for the five years from 1903 to 1907, inclusive, only 14} 
millions were raised in loans compared with 20 millions bor- 
rowed in the previous three-year period. The natural conse- 
quence, however, was that governments and corporations in 
Australia were increasingly compelled to approach the domestic 
money market for help in their financial difficulties; and the 
rising money rates were a direct outcome of the increased 
! “We must be satisfied that even the closing of the London money market is a 
blessing in disguise, for it means that not only our administration but also our 
public works for which we require to borrow money will be put on a business basis.’ 
— Treasurer of Western Australia in a Budget speech, 16 Oct. 
EXCHANGE QUOTATIONS OF AUSTRALIAN GOVERNMENT STOCKS 
Government Stocks. 
Victoria, 33 per cent. . . 
Victoria, 3 per cent.  . . 
New South Wales, 3} per cent. 
New South Wales. 3 ner cent.