46 THE QUEENSLAND INCIDENT OF 1866 
bank advances doubled within seven years, but deposits more 
than kept pace, and the banks were forced to seek fields for their 
investment. As will be seen in a later chapter, one such field was 
found in Victoria, and in the 1870-80 period the banks were 
already drawing overseas capital into that state. 
The financial history of the period shows very clearly the 
great dangers of prosperity. The classic crisis of 1893 was, in 
sober fact, bred by the piping times from 1872 onwards. The 
world setting was, indeed, fitted to produce such a cataclysm. 
The period was everywhere one of great business expansion and 
inflation of credit, as well as of great price fluctuations. Such 
conditions always tend to produce economic excesses, and the 
times were replete with examples of over-speculation. Ex- 
pensive and injudicious railway construction, particularly in 
North America and Europe, expansive ship-building, the digging 
of costly canals, and the production of all forms of heavy and 
expensive machinery, were some of the characteristic forms that 
capital expenditure of the day assumed. The rise in prices for 
processed materials was most marked in the case of the metals, 
and the mining developments to which reference has already 
been made were a world-wide response to the call of the 
speculator, for whom mining has always been such an attractive 
field. 
There was no lack of employment anywhere. The cost of 
living, too, in sympathy with price movements of most food- 
stuffs fell steadily; and this had the double effect of raising 
wages and increasing the speculative power of the community. 
These effects in Australia were materially strengthened by the 
large sums of borrowed capital spent by all the governments, a 
feat made possible by the extraordinary fondness now evinced 
by the British capitalist for Australian investments. In Victoria 
this was chiefly evidenced in the land and mortgage business, 
in which, even before 1880, over £10 millions of British capital 
had been sunk in that state alone. Melbourne as the financial 
centre, it is worthy of note, held at this time half of the total 
deposits of all the Australian banks. Nor was New South Wales 
any less active after a different fashion. Within five years after 
1872 the revenue from land-sales increased more than sevenfold. 
This had the effect of increasing government deposits in the 
banks, who were thus provided with the means for making