THE BOOM OF 1919 173 
rising prices and plentiful credit which stimulated both public 
and private enterprise. Further, Australia as a producer of food 
and raw materials which were in such urgent demand during 
these years found herself in a particularly favoured position. 
The unprecedented rise in price-levels, the increase in both 
imports and exports, and the great expansion of credit have 
been exhaustively examined by Professor Copland ; and it will 
not be necessary to do more at this juncture than to state his 
main conclusions.! The industrial expansion which accom- 
panied rising prosperity, and the government expenditure of 
loan money on repatriation schemes, war-service homes, closer 
settlement and developmental works exaggerated the upswing 
of business activity after the war to an extraordinary degree. 
The purchasing power of the community, vastly increased by 
payments on government and private contracts, was further 
swollen by distributions of deferred pay to repatriated 
soldiers and dependants. Although Copland indicates the 
expansion of credit as the chief cause of this artificial prosperity, 
it seems apparent that the fons et origo is to be found as much 
in borrowing as in banking. Capital importation was one 
officient cause which produced a whole train of phenomena 
which marks the boom of 1919. Tt is only fair to say, however, 
that despite the emphasis which he lays on inflation as the 
major cause he clearly recognizes the importance of the borrow- 
ing factor. He believes, too, that government expenditure was 
not the real cause of the boom, and that its influence was felt 
only after the boom developed; but fails, nevertheless, to in- 
dicate the initial importance of the enormously swollen flood of 
domestic and overseas loans on the credit structure. Of the 
seven factors which he detects as contributory causes of the 
boom, three only are not related in any way to the import of 
capital 2 
He recognizes also the important effect of private borrowing 
upon the expansive tendencies of the time. 
Joseph Fisher Lecture (University of Adelaide), 1921. Art. Economic Journal, 
Dec. 1920. Paper before Section G of A.A.A.S. Wellington, 1923. 
? Professor Copland’s analysis of the main causes of the great prosperity in 
business in 1919: 1. Increase in the prices of exports. 2. Rise in domestic prices. 
3. Expansion of credit and relatively low rate of interest. 4. Development of 
secondary industries. 5. The great overseas demand for raw materials and other 
products. 6. Government expenditure of loan money. 7. Natural psychological 
factors operating in all boom periods.