THE COMMONWEALTH, 1900-14 111 
conservation of all financial resources and, in particular, a sudden 
constriction in capital loans. A rapid shrinkage in the value of 
all investment stocks and particularly of government securities 
culminated in a third crisis in New York in September, and the 
Bank of England rate was raised from 41 to 7 per cent. between 
September 12 and November 14. 
It is unnecessary for our purpose to follow the course of the 
crisis abroad any further, but the effects on Australia of the 
disturbance to world credit are, of course, of the greatest in- 
terest. The shock was immediate and serious. The financial 
and trade dependence upon Great Britain, the break in prices, 
and the collapse of the American metal market and the Euro- 
pean wool market, would alone have produced severe effects. 
The seriousness of the decline in trade is indicated by the 
recorded figures. In 1908 exports from the Commonwealth 
fell £8 millions below the value of the previous year, and that 
despite an increase of £3} millions in the export of gold. Total 
overseas trade of all commodities declined, therefore, by 
£14 millions, since imports also fell by £2 millions. The 
excesss of exports over imports has a remarkable bearing on the 
Australian position at all times; and the general trend during 
this decade is of special interest and will be discussed more 
fully at a later stage. It will be sufficient here to mention that 
the total recorded excess of exports over imports reached the 
peak of £24-9 millions in 1906, but rapidly declined to £0-9 
million in 1912. The influence of borrowing upon this situation 
is also reserved for later consideration. 
But the whole of this decline after 1908 is not to be attributed 
to world conditions. Yet again at this juncture outrageous 
fortune decreed that a world credit shortage should coincide 
with unfavourable seasons and falling prices. The occurrence 
of drought over wide areas in Australia resulted in small harvests 
and a diminished wool clip. The translation of these adverse 
factors into terms of monetary strain induced a depression 
few millions imported might suffice to restore confidence in the United States it was 
worth while to devise ways and means for providing them. But now that the many 
millions shipped have been swallowed up without any improvement in the position 
on the other side it becomes clear that the only attitude for European finance to 
adopt and to maintain is one of the most vigilant self-defence, no facilities of any 
kind being granted to New York and no gold being sent thither except such as it 
can command by sale of produce or securities.’