AUSTRALIAN ECONOMIC HISTORY 3
in the attempt to develop diversity of industry by means of a
protective policy, Australia is able to produce only a small part
of the great range and volume of commodities consumed by her
people. Limited as she is by the conditions of the country in
regard to climate and natural resources, by the sparseness of
her population, and by the high relative cost of production, her
only method of purchasing the foreign products which her
people so insistently demand is by means of the commodities
for the production of which she has some outstanding advantage
a8 compared with other countries.
But there are other factors which enhance the importance
of overseas trade to the Australian community and which
make the statistics of international trade a fertile field for the
investigator of Australian business fluctuations. The most im-
portant of these factors is the unusual compactness and homo-
geneity of the Australian community. The concentration of
one half of the population of the country in the ports with all
the advantages in industrial efficiency which that concentration
implies, whatever the social disadvantages may be; and the
tendency to develop the few well-equipped ports, rather than
many less well-equipped, is perhaps an admission by the com-
munity of its dependence upon overseas trade. The radial con-
centration of railways in each state upon the relatively few
outlets from the hinterland, the comparatively narrow fringe
of coast-land along which the bulk of the rural population is
distributed, and the small numbers of the inhabitants with
relation to the territory occupied are other factors affecting
and being affected by overseas trade.
Furthermore, the centralization of economic and financial
sontrol, represented, on the one hand, by an arbitration system
which prescribes similar high standards of comfort for every
State in the Commonwealth, and, on the other, by an associated
banking system that treats the business of the community as
8 unity rather than as a congeries of states, has co-operated
With a railway system under government ownership and a
shipping system dominated by powerful combines to deepen
the customary grooves along which the economic Life of the
continent moves. It is necessary to enlarge a little upon the im-
portance of these factors. Professor Viner has declared of the
Canadian situation, ‘In a country of specialization in industry,