17¢ BOOM OF 1919 AND SUBSEQUENT DEPRESSION 
“This is not the place’, he says, ‘to criticize the general tariff policy 
of Australia, but the great increases in duties imposed in 1920 would, 
no doubt, encourage the expansion of establishments and the in- 
vestment of capital in factories. It would be difficult to find an exact 
statistical measure of this; but it appears certain, however, that it 
was a factor contributing to the boom.’ ! 
Assuredly it was; and, in so far as the tariff stimulated private 
capital imports it was, for the generation of boom conditions, 
only less important than the imports of public capital. The 
main causes of the post-war depression are to be found not so 
much in the outstanding events of the war years, as in the more 
normal operation of the factors which produce borrowing cycles. 
That ‘High money values and the enormous expenditure of loan 
money created conditions indicative of increasing wealth’ is 
surely attributable in the main to one factor, i.e. that capital 
was still flowing in faster than interest was flowing out. But as 
the burden of interest more and more nearly approached the 
volume of new capital, without any corresponding expansion 
of the value of production, the financial pinch was felt once 
again; and the prosperity of the post-war boom period stands 
revealed in its true light. The experience of 1893, 1903, and 1913 
had apparently all gone for naught, the hectic pleasures of the 
spendthrift were more enticing that the satisfaction from an 
expansion justified by earnings; and it was inevitable that the 
reaction would be severe in proportion to the excesses of 
ipending. 
That the severe contraction of loans from Britain in 1919 and 
[920 was a far more potent factor than the internal banking 
situation in hurrying on the crisis which was already preparing 
appears highly probable. That the chief factor controlling the 
situation in Australia was realized in some measure by successive 
Prime Ministers is indicated by the natural transition from the 
slogan of ‘Produce!’ adopted by Mr. Hughes to that of ‘Men, 
Money, and Markets’ which epitomized the policy of Mr. Bruce. 
That greater consuming power was desirable at home in order 
to diminish Australian dependence upon overseas markets, and 
that there was urgent need for greater productivity in order to 
sustain the growing weight of debt, were almost self-evident 
facts. What received far less sanction from the lessons of the 
{ Copland, A.A.A.8. paper cited above, p. 561.