Borrowing and business in Australia

Bibliographic data

Monograph

Identifikator:: 183051623X

URN:: urn:nbn:de:zbw-retromon-222122

Document type:: Monograph

Author:: Wood, Gordon L. http://d-nb.info/gnd/1239193688

Title:: Borrowing and business in Australia

Place of publication:: London

Publisher:: Oxford university press, H. Milford

Year of publication:: 1930

Scope:: xv, 267 Seiten; graph. Darst.

Digitisation:: 2022

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part IV. The commonwealth, 1900-14

Collection:: Economics Books

130 AUSTRALIA’S FLUCTUATING ADVANTAGE IN antil the smoothed moving-average curves are introduced on the graph that the extraordinary inverse correlation between the two becomes apparent. The fall in capital exports from Great Britain, midway in each decade, is faithfully reproduced in the Australian curves. But it is in the rise and fall of the excess of exports that our interest chiefly centres. The increase in exports as capital loans diminish, and the decline, i.e. the growing excess of imports, as borrowing revives, are obviously very closely correlated. For the score of years after 1890 the evidence that capital loans had the effect of increasing British exports to Australia cannot be doubted. The cognate pheno- mena in the two countries fit together too exactly for any other explanation to be feasible. The next phase of our examination concerns the banking situation in Australia during the period following 1900. In supplementing what has been said already on this matter, we are unable, however, to do more than strengthen the conclusions obtained from the earlier period, i.e. before 1893. Theory would lead us to expect fluctuations in overseas trade corresponding with the rise and fall of capital importation ; but neither theory nor the geographical situation of Australia would lead us to expect the surprising rapidity with which variation in the volume of trade follows the fluctuations in the flow of capital from Britain to Australia. Not once or twice, but in practically every instance, effect follows cause so closely and corresponds so intimately in degree that no other explanation of our prosperity phases would appear to be tenable. Banking figures also show a close correlation with the increase and decrease in capital imports. In the light of what was said in the two previous chapters, consider the changes in the bank- ing position as revealed by the statistics for the period which are given immediately below. The spell of stationary advances and deposits between 1900 and 1904, and the relatively heavy drain on the gold reserves towards the end of that phase, a drain that was repeated again in 1906, tell in unmistakable language the story of the difficulties imposed upon a country obliged to sontinue heavy annual interest payments during periods of deficient production. Just as patently the lean years give place to the fat ones as the period of prosperity, expansion of credit, rapidly rising prices accompanied by rising bank deposits and

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