108 THE COMMONWEALTH, 1900-14
the part of the London market. Business, in the eastern states
especially, was almost brought to a standstill by the sudden
constriction of credit which developed ; although even harassed
state treasurers were able to appreciate the salutary nature of
the check.! That the drying of the stream of loans was due to a
loss of confidence in Australia as a field of investment, as well as
to inability on the part of the Britishinvestor to lend, isindicated
by the fall in Australian government stocks at this time.2 Nor
were the difficulties eased by the disfavour with which advanced
Australian legislation was being viewed in Britain.
Hardening money rates, dullness in trade, stationary bank
figures, stagnation in industry, diminished customs revenue and
imports, declining immigration and a crop of business failures
were the outstanding characteristics of 1904, a year which
exhibited all the features of the recession stage of the cycle.
The increased strain thrown upon the productive activities of
the country is reflected in an expansion of exports by nearly
£91 millions, while economy is indicated by the decline of
nearly £2 millions in imports. The excess of exports over
imports increased from nearly £11 millions in 1903 to nearly
£20} millions in 1904, a feature that indicates the strength of
the community effort made under steady financial pressure.
The year is distinguished, too, by the decline in loan issues, in
fact for the five years from 1903 to 1907, inclusive, only 14}
millions were raised in loans compared with 20 millions bor-
rowed in the previous three-year period. The natural conse-
quence, however, was that governments and corporations in
Australia were increasingly compelled to approach the domestic
money market for help in their financial difficulties; and the
rising money rates were a direct outcome of the increased
! “We must be satisfied that even the closing of the London money market is a
blessing in disguise, for it means that not only our administration but also our
public works for which we require to borrow money will be put on a business basis.’
— Treasurer of Western Australia in a Budget speech, 16 Oct.
EXCHANGE QUOTATIONS OF AUSTRALIAN GOVERNMENT STOCKS
Government Stocks.
Victoria, 33 per cent. . .
Victoria, 3 per cent. . .
New South Wales, 3} per cent.
New South Wales. 3 ner cent.