IN RELATION TO PUBLIC BORROWING 175 
past was the plea for further supplies of capital for develop- 
mental purposes. This amounted to a wish to perpetuate those 
very conditions of expanding debt which constituted the chief 
cause of this and every other major Australian crisis; and to an 
admission that the serious effects of the uneconomic use of 
borrowed capital were not realized. Nor was there any great 
measure of agreement to be found among economists or business 
men. Even so keen an observer as Copland appears to minimize 
the significance of this great dominating factor in Australian 
finance; or, rather, to over-emphasize the effects of internal 
inflation as compared with those of the foreign borrowing which 
in part made this inflation possible. 
‘Too much has been made’, he says, ‘of abnormal war condi- 
tions and not enough of this inherent weakness (optimistic specu- 
lation during the boom) in business mgnagement. Yet it is a 
factor of overwhelming importance in explaining industrial con- 
ditions just prior to the crisis, and our present depression is, to a 
large extent, the result of an ordinary commercial crisis intensified 
by the extraordinary financial conditions (i.e. inflation) of recent 
vears.’ 1 
The pertinent inquiry here, of course, concerns the interpreta- 
tion he put on the phrase ‘ordinary commercial crisis’. Of the 
reiterated connexion between crises and capital imports the 
reader will by now be wellnigh weary. But there seems little 
doubt that the ‘extraordinary financial conditions’ were in- 
timately connected with the adjustments of credit consequent 
upon the flow and ebb of capital from Britain ; and it is difficult 
to avoid the conclusion that internal and external movements 
towards credit expansion were supplementary. 
[+ will be worth while at this stage to review briefly the onset 
of a crisis which was the prelude to a depression that has lasted, 
with brief interludes, until 1929. The first signs of recession in 
world business conditions came early in 1920, when an abrupt 
break in prices successively involved countries so widely sepa- 
rated and so differently organized as Japan, the United States, 
and Great Britain. The collapse was not long delayed in Austra- 
lia. The last phase of the boom had reached its climax in August 
1920 some months after the first check had been experienced 
L Thid.. ». 583.