THE GOLD DISCOVERIES 27 
unemployment. The distress of the moment was intensified by 
the high price for agricultural produce, a development for which 
the drought, now at its worst, was mainly responsible ; and it 
was not until the good season of 1856 that any relief in this 
respect was afforded. 
The course of events in New South Wales presents some 
notable features. For various reasons the prosperity of Victoria 
had not been shared by the mother state, in which trade was 
very depressed throughout 1855. Primary producers had very 
little money, while the purchasing power of the artisan classes 
had been reduced by rising prices and falling wages. Despite 
the warning presented by the crisis in Victoria, however, a 
strong tendency to speculation and over-trading dominated 
business in Sydney ; and once more gambling in land and farm 
stock became widespread. Land mortgages were the favourite 
form of investment, and the registrations averaged over three- 
quarters of a million a year. Imports swelled with amazing 
rapidity, although very heavy losses on account of excessive 
speculation had been suffered by many merchants. Suspicion 
and restricted credit succeeded this outburst ; and, by the close 
of 1859, the financial pressure had developed into a serious 
depression characterized by stagnation in every industry. In- 
solvency once started, petitions followed close upon the heels 
of one another until, in Sydney alone, losses of more than a 
million pounds had been recorded. Disastrous floods completed 
the depressing picture. 
The expansion of banking and exchange during the period 
has an important bearing upon later events that must be noted 
here! The capital introduced by immigrants, and later, the 
wealth stored in the banks and representing the product of 
work in the mines, affected the banking position in a marked 
manner. An enormous increase in bank deposits was followed 
by a remarkable inflation in the note issue that accompanied 
the great rise in prices during these years. The transition 
period in industry which followed the crisis, and which was 
marked by a swing away from mining and towards the primary 
industries. had its effects in modifying the banking system in a 
! For the effects of the gold discoveries upon banking in Australia see J. Russel] 
French, Banking as a Factor in the Development of Trade and Commerce, Joseph 
Fisher Lecture, University of Adelaide. 1910