THE PRELUDE TO THE COLLAPSE OF 1893 57 
The unfolding of the drama in New South Wales serves, in 
some respects, as a contrast to the course of events in Victoria. 
It must be remembered that the older colony had developed the 
pastoral industry whilst somewhat neglecting agriculture ; and 
this tendency accentuated the dependence of the colony on the 
world market conditions for animal products and particularly 
for wool. This state of affairs had a very marked effect on 
developments in New South Wales between 1880 and 1890. 
Pastoral properties were marked out for attention by the British 
capitalist, and in this circumstance the corresponding boom 
period in that colony had its rise.! As a direct result land sales, 
and government revenue from this source, increased enormously, 
the revenue alone rising in 1881 by one and & quarter millions 
above that for the previous year. The buoyancy of commerce 
and industry also assisted towards the production of a ‘three 
million surplus’ at the end of the year. As a result of successful 
loan issues, government deposits in the banks were far in excess 
of anything known hitherto; and these furnished the where- 
withal for advances for land purchases. All this was, of course, 
almost exactly a repetition of the conditions preceding the 
disaster of 1843. Finance moved once more in the same old 
vicious circle. 
Between 1882 and 1888 precisely similar conditions prevailed 
in Sydney as in Melbourne, although on a somewhat more 
subdued scale since the effects of the 1884-5 drought were 
naturally felt more severely in a pastoral community. The year 
1888, however, offered some remarkable contrasts in the two 
colonies. This year, which saw the land speculation in Melbourne 
at its very pinnacle, saw the decline and finish of the land boom 
in Sydney, where investors now turned as eagerly towards 
mines as they had previously towards city estate.? Two factors, 
however, were combining to call a halt as far as Sydney was 
concerned. The first of these was due to the dominant position 
of Victoria in financial matters. Most of the banks were already 
feeling the drain imposed by the Melbourne boom. and were 
1 The British investor displayed as much readiness to take up securities in New 
South Wales as in Victoria at this time, and 4 per cent. N.S. W. stock was quoted 
at 110. 
3 A fair index to the inflation that had occurred, although & conservative one, 
is given by the municipal assessments of Sydney and suburbs which increased by 
over £20,000,000 in five years. 
ar10