viii CONTENTS 
CHAPTER VIII. AUSTRALIA'S RELATIVE DISADVANTAGE IN 
OVERSEAS TRADE AFTER 1890 . . 86 
Preliminary examination of the terms of trade—the distinction between gross and 
net barter terms of trade—the meaning to be attached to ‘favourable’ and ‘un. 
favourable balance of trade’—vphases of the borrowing cycle—the theory of the 
borrowing cycle in its application to Australia between 1880 and 1896—the statistics 
of banking and borrowing—effects of borrowing upon sectional price levels and 
wages—measurement of the community effort needed for recovery. 
PART IV 
THE COMMONWEALTH. 1900-14. 
CHAPTER IX. THE COURSE OF BUSINESS FROM 1900 TO 1914 . 104 
Economic effects of Federation—characteristic features of the period—depression 
after 1900—rationing of loan issues in London—minor crisis of 1903—rapid recovery 
after 1905—Australia in relation to the world crisis of 1907—credit reactions and 
price movements—the Commonwealth Government and banking policy—the threat 
of crisis in 1913. 
CHAPTER X. ANGLO-AUSTRALIAN EXCHANGE IN RELATION TO 
CAPITAL MOVEMENTS AND TRADE, 1800 TO 1913 . : . 116 
Financial relations between Australia and Great Britain—gold movements and 
their causes—effects of credit contraction in London—credit dislocation in Australia 
consequent upon capital importation—effects upon group prices—seasonal exchange 
disturbances—control of capital movements—the mechanism of adjustment in 
Australia and Britain—the relations between borrowing and banking under the 
gold standard. 
CHAPTER XI. AUSTRALIA'S FLUCTUATING ADVANTAGE IN 
TRADE FROM 1900 TO 1913 : 3 . 126 
Connexion between stoppage of loan issues and restriction of bank credit in Austra- 
lia—domination of bank policy by capital loans—the parallels to be noted between 
U.S.A. after 1870 and Australia after 1890—correlation between new loans and 
excess of imports—the banking situation after 1900-—changes in sectional price 
levels and in wages—the terms of trade over the period. 
CHAPTER XII. THE AUSTRALIAN BALANCE OF INTERNATIONAL 
INDEBTEDNESS FROM 1900 TO 1913 . 3 . . 141 
The balance of indebtedness examined—the commodity balance of trade—the 
‘service’ balance—the problem of freight charges—capital investments and interest 
payments—capital movements connected with migration—comparison of net 
indebtedness with imports of capital. 
PART V 
AUSTRALIA DURING AND AFTER THE GREAT WAR 
CHAPTER XIII. BANKING AND BORROWING POLICIES IN AUS- 
TRALIA DURING THE WAR . . . 183 
The great inflation—price movements—developments in Commonwealth banking 
policy—the new borrowing cycle—British and Australian price levels compared— 
the widening margin between interest payable overseas and disposable income. 
CHAPTER XIV. THE BOOM OF 1919 AND THE SUBSEQUENT DE. 
PRESSION IN RELATION TO PUBLIC BORROWING . . 172 
The relative effects of inflation and borrowing upon the price level—effects of the 
capital shortage after 1919—the course of events outlined-—causes of crisis— 
differential effects of borrowing upon the rewards to the factors of production.