TRADE BETWEEN 1900 AND 1913 127
settlement had passed; and the stage of expansion and the
moving frontier was merging into that stage of consolidation
marked mainly by the need for capital. From about 1870
onwards one of the great bursts of international capital move-
ment was associated very intimately with railway construction
in most of the new lands; and, without sufficient counting of
the costs, expansion was pushed on recklessly in both Australia
and the United States. The crisis of 1873 was the nemesis in the
United States just as that of 1893 was in Australia!
“The collapse’, to use Taussig’s words, ‘was as severe in the United
States as elsewhere, and—what is significant for our subject—led at
once to a reversal of the relation between imports and exports.
Imports suddenly dropped and continued low until the end of the
decade. Exports increased almost at. once, continued to expand,
and began to be greater than the imports. The situation thus
dramatically initiated was thereafter maintained for over forty years,
until a new dramatic overturn came with the Great War.’
So singular is the precise application of these words that, with
the substitution of ‘twenty’ for ‘forty’ years, they might have
been written of Australia after 1893. But the facts of capital
loans dominate the situation in both countries to such an extent
as to put the possibility of a mere coincidence completely out
of court. The circumstances but reflect the long-period effects
of two large-scale, but identically similar, experiments in
capital injection carried out in different laboratories.
The course of events in Great Britain during this time was
in nearly every respect the complement of that in the United
States, Canada, and Australia. In particular, the international
trade of Australia and Great Britain represents ‘two aspects of
one and the same series of operations. More especially the loans
of one and the borrowings of the other were closely connected with
the recurring alternations of activity and depression. The export
of capital from Great Britain increased rapidly during the
upswing stages of the several cyclical periods, and her excess
of merchandise imports then declined: relatively her exports
became greater.’? The same stages appear in both Australian
and American experience. In Australia, after a period of vacilla-
tion, imports achieved an overwhelming dominance during the
\Taussig, International Trade, Chapter XXIV.
? Paussig, ibid., p. 283.