TO CAPITAL REQUIREMENTS 253 
been associated with healthy business; nor, on the other hand, 
have poor seasons invariably coincided with depression.! That 
this is substantially true-cannot be doubted; and the reason, 
at any rate in recent years, is to be found in the diminishing 
dependence of the total volume of Australian production upon 
weather conditions. The balance which is being established 
between primary and secondary industries, the application of 
science to Australian rural problems, the measures to combat 
the onset of drought which have been taken in every state, the 
improvement in transport facilities, the progressive exploita- 
bon of new resources, the great extent of the continent, its 
climatic variety and the improbability of adverse seasons affect- 
ing the whole area simultaneously, all these are helping to 
stabilize production. The steady uninterrupted march in the 
total value of production is sufficient evidence of this fact. 
That there is a diminishing degree of coincidence between 
seasonal conditions and business fluctuations merely emphasizes 
the importance to be attached to the effect upon the domestic 
credit situation of the introduction of capital. The wide swings 
in business prosperity have been traced in every major instance 
to abrupt fluctuations in the rate at which capital was being 
introduced, and to the strain thrown upon the banking organiza- 
tion by the necessity for adapting Australian monetary policy 
to the condition of world credit as expressed by the readiness 
or reluctance of London to lend on long terms for Australian 
development. 
That a more scientific control of borrowing from the Australian 
end has not been developed is, of course, due to the fact that all 
branches of business, and particularly importing and contracting 
enterprises, are vitally interested in promoting and maintaining 
the flow of foreign capital. Large annual loans mean an en- 
larged purchasing power which is radiated to the remotest 
settlement in the country, they mean expanding customs 
revenue and easy conditions for government finance, they mean 
a large volume of merchandise passing through warehouses, 
they mean corresponding stimulation of exports and that spells 
satisfaction to export agencies, they mean profits to the banks 
and to the smallest traders. The farmer, expectant of subsidies 
1 See Copland, Appendix to Development and Migration Report on Unemploy- 
ment. 1928.