110 THE COMMONWEALTH, 1900-14
gold-mining as a staple industry. The one cloud in the financial
sky was the approaching maturity of the old debts, and the
consequent necessity for troublesome and unproductive con-
version operations.
We must now leave Australia at the moment when she was
entering perhaps the most uniformly prosperous period of her
history, and direct our attention once more to the course of world
events. Thespacioustimesof 1906 and 1907 were, in fact, largely
a reflection of similar conditions then prevailing in most of the
countries of the world. Nowhere, however, had buoyant enter-
prise and industrial expansion been more marked than in the
United States, where trustified industry’ aided by the enormous
immigration of the period had built up a system of mass pro-
duction and inland transport that was the marvel of the
economic world. This ‘rampant prosperity had begotten reck-
less speculation and in no direction had this evil assumed larger
proportions than in real estate’. But, with the opening of 1907,
bankers, statesmen, industrial leaders, and economists were
becoming apprehensive of an imminent collapse.! American
bankers, indeed, were already preparing for the worst by build-
ing up their gold reserves at the expense of Great Britain, a
development that engendered much hostile criticism and no
small financial disturbance in London, where discussion con-
cerning the adequacy of the gold reserves of the Bank of
England clearly indicated widespread uneasiness.
[n middle March, owing to the fact that the demand for
capital had outrun the immediately available supply, a sharp
panic in New York was precipitated by a ‘bear’ movement
which was deliberately engineered but got out of control. This
was followed a week later by a violent collapse in which national
and savings banks, trust companies, industrial groups, and
public credit generally were deeply involved. London financial
interests, realizing the gravity of the position, immediately
abandoned any attempt to stave off disaster in the United
States.2 and concentrated on safety measures which implied the
! Professor Andrew of Harvard University indicated an attitude of mind that
was very general: ‘It is then simply because the United States has enjoyed a fabu-
lous prosperity for an unusually long period that one may conclude that the situa-
tion to-day only requires some sharp blow to the general confidence to precipitate
a new movement of liquidation and reorganization.’
2 T.ondon Times of 15 November: ‘When there was a reasonable chance that a
