34 PROSPERITY AND CRISIS AFTER
The correspondence between gold production and total
imports is the first fact of importance. Adjusting the ‘lag’ of
twelve months needed for the gold production of a period to
be translated into the imports of the following period, it will be
seen that the consilience is perfect and affords ample ground for
the main contention that the effect of the gold production upon
the trade balance was exactly the effect that the introduction
of so much capital would have had.
Tasre IIT
Gold Production and Imports, New South Wales and Victoria
Gold Production (In £m.). Imports.
Year.
~w
Total.
ag.
Total.
1852
1853
1854
1855
1856
1857
1858
5-8
02
)8 8-6
0-7 117
7 13-9
0-7 11-0
1-1 10-1
19-5
14.0
9-4
124
14.8
117
11-2
9
“3
+0
=7
3:5
39
6-1
1
58
377
12-0
15-G
17-5
15-1
6-0
22-1
18-3
16-7
20:5
240
21-2
The balance of trade for the period affords some striking
evidence of the tendency of a young country passing through a
stage of exuberant prosperity to ‘outrun the constable’ in the
matter of imports. It was a period, also, in which public
borrowing certainly increased but not at an unjustifiable rate.
In 1852 New South Wales was alone in the possession of a public
debt, and that amounted to a mere £212,000. This had risen
by 1855 to £1,011,300, in which year Victoria made a beginning
by borrowing £500,000. By 1860 the total debt for both colonies
was £9,000,000 in round numbers, of which the Victorian share
was £5,200,000. Taking into the account the amount of bullion
and specie, both inwards and outwards, a pronounced change is
observable in the trade balance after 1852, i.e. almost as early
was limited to something like £3 per ounce. No wonder that enormous
shipments of merchandise of every conceivable kind and character poured
into the colonies, where they not only found a profitable market but could
command returns in the shape of exchange or gold purchasable upon such
advantageous terms. Nor marvel is it that prices soon found a more even level
through all the available exports from the colonies being required to pay for the
imports, which it should be mentioned included large shipments of British coin.’
' From Coghlan, Labour and Industry in Australia, and presumably based on the
annual Statistical Abstract for Colonial Possessions published by the British Govern-
ment. See also Tooke and Newmarch, History of Prices, pp. 791 ef seq.