56 THE PRELUDE TO THE COLLAPSE OF 1893 
increasing advances enormously, and the greater part of the 
increase went to bolster up allied land companies.! In the face 
of the competition by the land companies, much of it grossly 
unscrupulous, the established banks and building societies found 
it was impossible to restrict their activities to their legitimate 
functions without losing the confidence, or at least the deposits, 
of their customers. ‘This year saw the largest business ever 
transacted, the greatest fluctuations in prices, and immense 
flotations. Its morning commenced with active business and 
rising prices, advanced to wild speculation and inflated values 
at noon, and closed at night with relaxed tone, falling prices, 
and a stringent market.” The mines of Broken Hill became the 
centre of speculative interest. The boom continued for the whole 
of the first quarter. ‘Grey-haired men saw, aghast, their 
juniors making competencies in a few months by speculation in 
mines.” Then a rapid decline set in, and the market value of 
shares listed in Melbourne fell by nine million pounds in a single 
month.2 
The land craze, however, continued undiminished.3 The 
building trade, too, was at the height of its activity; and, as 
yet, there were no signs that the wonderful outpouring of capital 
from Britain would ever diminish in volume. It can easily be 
realized that, with the enormous burden of debt and inflation 
which oppressed it, the ordinary production and enterprise of 
the continent could not be otherwise than stagnant. And to the 
whips of inflation and speculation prepared in the decade just 
ending, were to be added the scorpions of drought and falling 
prices in the period now commencing. 
! Perhaps nothing shows the character of the business better than the case 
selected by Coghlan in which the Colonial Investment and Agency Company 
declared a profit of over £29,000 for the half year, of which £12,000 represented 
appreciation in value of freehold properties. 
With a capital of only £7,500 the Investment Company was able to show a hand- 
some profit of £24,717 after writing off preliminary expenses. Mercantile Finance on 
a net profit of £172,340 declared a profit of 60 per cent. for the half year. (Coghlan, 
Labour and Industry, p. 1700.) 
¥ Melbourne Stock and Share Market, 16 Jan. 1889. Broken Hill shares were 
quoted at 84} in 1887, rose to 413 in February 1888, and closed at 302. The 
most spectacular call in the history of the Melbourne Stock Exchange was 
the sale of 2,500 B.H.P.’s for nearly £112,000. At the height of the boom the 
Stock Exchange did business all night, and the operations for 20 Jan. 1888 totalled 
£2,000,000. 
® In one week over thirty subdivisional sales took place in Melbourne.