PART I 
CHARACTERISTIC FEATURES OF AUSTRALIAN 
BUSINESS AND AN ACCOUNT OF THE EARLY 
YEARS 
CHAPTER I 
CHARACTERISTIC FEATURES OF AUSTRALIAN 
ECONOMIC HISTORY 
The inward movement of capital dominated all other factors in Canada’s foreign 
trade during the period of heavy borrowings, and the variations in the inward fiow 
of foreign capital were marked enough to effect sharp correlated variations in other 
elements in the situation. As a consequence an inductive study of Canada’s inter- 
national trade during this period becomes largely a study of the adjustment of 
Canada’s trade balance, currency and banking system, price levels, and industry in 
general to a heavy import of foreign capital.’ — Professor JACOB VINER, Canada’s 
Balance of International Indebtedness. 
Panics do not destroy capital: they merely reveal the extent to which it has 
previously been destroyed by its betrayal into hopelessly unproductive works.'— 
J. 8. Mirt, Address to Manchester Statistical Society, delivered 11th December, 
1867. 
‘Economic History is not catastrophic.’—F. W. MAITLAND. * 
A CLOSELY-LINKED series of economic phenomena quite re- 
markable in their similarity is associated with each of the 
major Australian crises. Commencing, apparently, in some 
loss of confidence in colonial affairs manifested in Britain a 
marked check to a buoyant prosperous period was usually the 
first sign. The flow of trade and the related revenue received 
the first shock, and the impact was carried on to show itself 
in government deficits. On the other hand, depressed world 
conditions often resulted in diminished prices for primary 
products and thus affected both purchasing power and banking 
policy in Australia. Constructional and developmental work 
Came to a standstill, taxation burdens increased at the worst 
Possible time, and the flow of immigration always slackened. 
These are, of course, not features peculiar to the depression 
stage of the Australian cycle; but they stand out more promi- 
nently from related phenomena than is the case in older and 
larger communities. 
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