TRADE BETWEEN 1900 AND 1913 133 
figures for gold retained in the Commonwealth for the first half- 
dozen years of the period is of particular interest. The contrast 
between the £6 millions retained in 1905 and the net loss of 
nearly a million in 1903, despite the fact that gold production 
was in that year a record for the decade, is a direct reflection of 
the effect upon gold stocks of good and bad seasons. A series 
of dry years meant a deficiency in exports which had to be made 
good by gold shipments. The small quantity of gold retained in 
the early years is sharply contrasted with the high and relatively 
steady figures for the years from 1907 to 1911. The sharp decline 
in 1911 and 1912 constitutes a considerable loss of gold which 
again has to be contrasted with the very high retention of 
nearly £8 millions in the next year. The correlation with the 
upswing of capital import and the adverse movement of the 
commodity trade balance is again too clear for doubt. 
The records of price movements during the period also contain 
evidence of the utmost importance. Over these years of heavy 
but unevenly spread borrowing we should expect prices to rise 
more rapidly than for Great Britain during the acceleration 
phases; and to display a marked convergence towards Great 
Britain following the stoppage of loans and the onset of financial 
stringency in Australia. With this in mind the graph of whole- 
sale prices in Great Britain and Australia for the period is of 
importance (Fig. XI). The long-period rising trend in prices is 
clearly exhibited by the parallel moving-average curves; and 
the Australian price-level relative to the British, rose in the 
earlier and fell in the later phase of the borrowing cycle. A 
slight tendency for the levels to approach one another to- 
wards the end of the period is discernible, but is not clearly 
marked. Indeed the great outburst of loans in 1912 and 1913 
would lead us to expect otherwise. The coincidence of financial 
stringency with the break in prices is very emphatic for the 
three periods of crisis. 
The effects of borrowing, however, should be more clearly 
indicated when the sectional price-levels for export, import, and 
domestic commodities are compared. While the statistical data, 
especially on the side of imports, is defective in some respects, 
the material available is far more complete and accurate than 
that obtainable for the 1880-93 period. It is therefore a 
matter for satisfaction to find once more that the phenomena