Full text: Borrowing and business in Australia

injection of disease into the Australian financial organism; 
and that the accumulation of infection was more than the 
work of a moment. The prime cause of crisis, at least in 
Australia, is to be found in conditions antecedent, often by a 
decade, to the actual onset of the trouble. The object of this 
inquiry, therefore, is to cut away the irrelevant tissues which 
are 80 apt to confuse the mind in post-mortem examinations 
of this character, to expose the main artery whose adequate or 
deficient blood-supply means so much to the body economic, 
and to demonstrate that precisely the same causes have 
been operating in Australian business since the early days 
to affect the volume of that stream and. consequently, our 
This observation suggests further remark upon the methods 
to be employed in solving the economic problems now facing 
all countries of recent settlement, or countries in that stage of 
transition where large supplies of new capital are a sine qua non 
of development. In the matter of application of capital, even 
less than in any other corner of the economic field, is the method 
of experiment under rigid controls possible ; but there is, there- 
fore, an enhanced necessity for making the utmost possible use 
of the observations and deductions of thinkers who are working 
along similar lines in different parts of the world. The need for 
unifying economic knowledge is nowhere more insistent at the 
present time than in the matter of the application and direction 
of capital; and the problems under this head are very similar 
for all those countries which form the pioneer belts of the 
world. Capital may be, indeed has been, sunk on too large a 
scale in unproductive or obsolescent enterprises, especially 
upon duplicated and alternative systems of power and trans- 
port; and the net outcome has been considerable wastage of 
capital and a permanent interest liability that, by more com- 
plete foreknowledge, might conceivably bave been avoided. 
Capital, thus misapplied, might by wiser direction have been 
devoted to serving the needs of the Commonwealth in quite 
different and more effective modes. Sir Josiah Stamp has said, 
‘We still have to face the fact that, looking at our economic 
interests as a whole, there may be a great waste of capital due 
to its piecemeal application’. .That has been profoundly true 
of Australia where seven independent and often competitive

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