AUSTRALIAN ECONOMIC HISTORY 7 
take effect by way of a contraction of credit, the volume of the 
public debt and the rate of continued borrowing in their influence 
upon credit are to be regarded as the main credit controls, 
In addition to the variation in the rate of capital imports, 
special factors are to be detected in the national economy which 
fluctuate just as widely and even more suddenly than the rate 
at which capital is being injected into the economic organization, 
and both the boom and depression phases of the cycle are liable 
to intensification because of their operation. Australia is a 
country that has been in the past, and still is to a lesser degree, 
peculiarly subject to wide fluctuations in production due to the 
effect of adverse seasons. And such seasons of deficient produc- 
tion appear themselves to follow a cyclical movement which 
results in a series of lean years rather than an isolated year of 
scarcity. Such a sudden and protracted lowering of productivity 
accentuates the variability in that residue of national income 
available for the community, and intensifies the difficulty of 
meeting overseas liabilities at the very moment when it throws 
upon the community the necessity for increased production. 
Aggravate the position still further by a fall in prices, such as 
was a frequent concomitant of the depression stage of the cycle, 
and the imperative necessity for increased production to avoid 
temporary insolvency is easily appreciated. 
One phenomenon always associated in an unusually intimate 
degree with the bursts of prosperity in Australia has been specu- 
lation in land. This feature requires some explanation and 
perhaps, too, some reconciliation with the general theory here 
developed. Borrowing in its complete sense comprises far more 
than the mere introduction through public authorities of 
capital from overseas sources. The economic effects of the 
introduction of private capital due to the attractiveness of the 
country for the overseas investor are in no way different from 
the effects of public borrowing. And, further, capital may be 
forced upon a community by the eagerness of the foreign in- 
vestor to share in the opportunities for profit offered by a new 
country. This ‘willy-nilly’ form of borrowing was a marked 
characteristic of several periods in our history, and more 
particularly of the period between 1880 and 1890 when, as will 
be seen later, capital was poured into the country at such a rate 
that the ordinary channels of finance became choked. and