178 BOOM OF 1919 AND SUBSEQUENT DEPRESSION
(5) Heavy importations due largely to the supplying of
orders long overdue.
(6) The drop in metal prices.
(7) The difficulties of regulating industrial costs to the
changing price-level.
(8) The decrease in production towards which the poor
season of 1919-20 largely contributed.
(9) The psychological reaction from the boom period.
The analysis of previous Australian crises has prepared us to
detect the connexion, mainly of a very direct nature, with the
great underlying cause of capital shortage. For reasons which
need not be examined here the creation of fresh capital supplies
receives a check; and Britain, as the great market for inter-
national loans, immediately sets the marvellously sensitive
organization of the money market to the task of rationing the
available supplies. Upon Australia, accustomed for the greater
part to receive her applications for capital without question,
such a stoppage of supplies has an immediate and peculiar
significance which is reflected in the deflation, changing price-
levels, and restriction of domestic credit lying behind the causes
of the crisis outlined by Copland.
Further analysis of the relation between borrowing and
business is deferred to the succeeding chapters; but before
passing on to an examination of the balance of indebtedness
and the effects of the return to gold some further facts in the
domestic situation call for notice. During the years now under
discussion the great amount of foreign capital invested in
Australia, taken together with the normal increase from com-
munity savings, resulted in a much greater relative increase in
the total stock of capital than in the supply of either labour or
land for the purposes of production. The population of Australia
between 1913 and 1928 increased from 4-8 to 6:3 millions, a
total increase over the period of 31 per cent. According to the
estimates here collected the stock of capital as measured by
the estimated increases from various sources grew from £380
to £660 millions in the same period. Even for the very con-
servative allowances we have made for capital imported, this
represents an increase of 73 per cent.; or, if we adopt the
standard of the 1913 wholesale price-level, a rise of 45 per cent.
These figures for capital increase can be checked from another