74 IMPORTATION OF CAPITAL INTO 
of Europe is an exceedingly difficult matter. The complexities 
of long-established business, and the continuous movement of 
securities to and fro across frontiers make anything more 
than approximate estimates of the net migration of capital 
almost an impossibility. While these difficulties do not exist 
to the same degree in Australia because of the simplified 
economic structure and geographical isolation that were dis- 
cussed earlier, the methods and distribution of capital importa- 
tion are not easy to trace. Especially is this true for that 
portion, ‘the speculative stream’, which is invested privately. 
[t reaches the country through so many carefully concealed 
channels, and from so many sources, and it assumes such diverse 
forms, that nothing more accurate than approximation can be 
attempted. 
A very complete and concise instance of the effects of borrow- 
ing upon an isolated community is afforded by the statistics of 
New Zealand trade after 1872, and a brief survey of these will 
serve as an effective preliminary to the examination of the 
Australian figures. An increased flow of British capital began 
in 1872; and, for the next nine years, the average of borrowings 
was maintained at about £4,000 per annum for every thousand of 
population. After 1882 the stream of loans rapidly diminished ; 
and, by the close of 1886, it was completely dry. A situation 
then arose in which not only was Britain declining to lend new 
capital but was not even re-lending sufficient of the old capital 
to balance New Zealand’s interest payments. In the decade 
immediately following 1886 the community was faced with the 
alternatives of insolvency, or of paying unaided the whole of 
the interest bill. The contrast between the early years when 
sapital was flowing in freely at the rate of £4 per head per annum, 
and the later years when £5 per head was being raised with 
sxtreme difficulty to cover the payment of interest on the over- 
seas debt, is the key to the history of the colony over those two 
decades. The extraordinary prosperity of the early period when 
population was increasing at the rate of 10 per cent. per annum, 
when industries were prosperous and labour and enterprise 
handsomely paid, has to be set against the depression of the 
later years, when population was emigrating at such a rate that 
natural increase barely balanced the exodus, and when the 
standard of living had fallen in a startling manner. ‘Secarcely