60 THE PRELUDE TO THE COLLAPSE OF 1893
ture shrinking, and, before 1890, the government was facing a
deficit of nearly one and a half millions. Everything indicated
that the crescendo of speculation was finished, and that the
diminuendo of depression was about to commence.
Events in South Australia during the decade ran a very
chequered course. There are reasons for believing that the specu-
lation of the time originated in that state, but if so it was very
soon over. This activity reached its peak as early as 1882, when
it was suddenly checked by the banks closing down on all
advances of a speculative character; and, to point the moral,
even the government was denied accommodation. Pronounced
credit shortage prevailed until the depression touched bottom
in 1885. Unemployment was rife, population was trickling away
to other states, most of the copper mines had stopped work on
account of the low price of the metal, wheat and wool prices
remained hopelessly low despite the almost total failure of the
harvest and a small clip, and the government budget showed a
deficit of £700,000. Such a conjunction of evil circumstances
South Australia had not known since the Gawler crisis. The
universal distress and the general economic situation were most
reminiscent of the bad times of 1840.
The finishing touches to a picture of unrelieved gloom were
given by the failure in February 1886 of the Commercial Bank
of South Australia, a local institution that had become largely
identified with the rural interests of the province and which had,
therefore, been very severely hit by bad seasons. Even more
sensational than the actual failure were the revelations of fraud
and embezzlement. The resulting suspicion, under which all
the banks fell, added to the general uncertainty and affected
business disastrously. A crop of bankruptcies followed closely
on the heels of the Commercial Bank failure, bank reserves
disappeared, and the Savings Bank suffered from a run on its
deposits which not even a government guarantee could stop.
The straits to which the land finance companies were reduced
can well be imagined, for the land boom in this state was by
this time merely a matter of history.
But this proved to be the darkest hour preceding the dawn
of better days for South Australia. With the breaking of the
drought, the rise in the price of copper, and the wonderful
discoveries at Broken Hill, confidence crept back into business ;