Borrowing and business in Australia

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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

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Document type:: Monograph

Structure type:: Chapter

Title:: Part V. Australia during and after the great war

Collection:: Economics Books

IN RELATION TO PUBLIC BORROWING 177 which took place during the war years as well as the tension which developed after the crisis is indicated in the following table: June 30 of year 914 . [919 . 2 1920 . . 1921 . 19029 Deposits in Australian Banks! TABLE XL Percentage reserves to current deposits. Percentage reserves to total deposits. Deposits. Join, bullion, and notes. £m. £m. 159-209 231-270 247-647 248-231 240.200) 41-447 58 57-894 19 56-940 | 42 56-120 44 55-200 45 26 25 23 23 9% The lower margin of safety as expressed by the ratio between reserves and deposits before and after the war is here clearly expressed. Even after the very strenuous efforts made by the banks to strengthen their position by means of a drastic re- duction of credit, the percentage of reserves to total deposits was no higher than 19-5 in September 1921, as compared with about 25 per cent., which was regarded as normal in the pre-war period. It will now be of interest to gather together the several factors combining to produce this recession phase in Australian business. Copland indicates the following as the chief causes of the crisis, and they form an interesting comparison with factors which were operative in producing the boom.? They are as follows: (1) The deflation in England and America, and the heavy fall in domestic prices. (2) The over-issue of credit beyond the limits allowed by reserves. (3) The stringency of the money market, and the action of the banks in respects of credits. (4) The heavy fall in prices of agricultural products and meat, and later on of dairy products, i.e. a general fall in the export price-level. 1 Commonwealth Finance Bulletin, No. 13. ? Copland, A.A.A.S. paper cited above. An

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