AND THE CRISIS OF 1878 45 
a period of great mining activity after 1885, when the rich 
Zeehan and Lyell deposits of silver-lead and copper were 
developed. A great part of this activity falls after 1878, but 
the optimism generated by the early discoveries, especially in 
the mind of the overseas investor, was a prime factor in pro- 
moting the crisis of that year. 
Turning to the rural industries, both agriculture and pasture 
made good progress, in spite of a considerable and progressive 
decline in the prices of all primary products. J udged by produc- 
tion, however, the pastoral position had never been so strong. 
Sheep increased from 40 to over 100 millions, and the yield of 
wool from 200 to 600 million pounds. This was largely due to 
magnificent seasons, broken by only one serious drought—that 
of 1881-2, which falls beyond the immediate period under con- 
sideration and was particularly disastrous to the Riverina 
district. 
Fluctuations in the prices for staples constituted the main 
disturbing factor in the last quarter of the century. The first 
falling away in prices occurred in 1875 after a period of high 
returns, and within two years they had dropped by one-sixth. 
The loss in value of yields was, however, counteracted, to some 
extent, by the increase in acreage and in flocks and herds. 
The new price-level was maintained until 1884 when another 
severe break of 16 per cent. was experienced. No further change 
took place until 1890 when disaster descended in the form of 
a 30 per cent. reduction in market values of primary products, a 
total decline in twenty years of more than 50 per cent. Again 
the greater part of this decline does not affect the period immedi- 
ately before 1878, but ib is necessary to realize that the long 
downward swing in prices which terminated about 1890 really 
commenced during that phase of Australian development which 
is now under discussion. 
But the money market had never been easier. In 1871 the 
various Australian governments owed somewhere about £30 
millions to Britain; but, by the end of the next decade, this 
total had more than doubled. It is worthy of note that most of 
the new debt was devoted to railway construction. After 1871 
! For the pastoral industry after 1886 the fall in the price of wool ‘almost can- 
celled the effect of the increase of flocks’, (Coghlan, Statistical Account of 
Australia)