and the application of it to productive purposes, are conducive to true progress; while, on the contrary, the over-introduction of capital, however applied, means arrest of progress. An example of this may be taken from the history of New South Wales during this period. Of the twentytwo years comprising this industrial period, 1885 and 1886 witnessed the largest introduction of capital, namely, £11,470,000 in the former, and £10,028,000 in the latter year. It is therefore not astonishing to find that the value of domestic produce exported in those two years, when compared with the population, was less than in any other period since the discovery of gold. It must not, however, be supposed that the money introduced by the state or by private persons was to any large extent absolutely wasted. The states carried out many public works of a remunerative character and highly beneficial to the community generally, and the foundations of many important industries were laid by private enterprise during the period. It is true many private investors suffered great loss by the fall in prices which subsequently occurred, but this was a private evil and not a national one. The most detrimental effect produced by the "boom," as it is called, was the withdrawal of large bodies of men from productive pursuits and the derangement in the labour market which immediately ensued.

An interesting discussion has been raised as to the effect of the import of capital on the productive enterprises of the country, and a close study of the question undoubtedly supports the opinion that although Australia is capable of absorbing yearly a certain amount of capital to the advantage of the Commonwealth and of persons who make the investment, the amount is strictly limited, and has been frequently over-passed. It will be seen from the facts set out in the chapter relating to Private Property and Incomes that, in some years, the various state Governments have hardly set bounds to the importation of money to forward their state enterprises, while the importation of capital on private account has also been, at times, unduly large. If the figures in the different parts of this volume be brought together, it will be clear that the years in which an undue importation of capital took place compare unfavourably as regards production with years in which there was a more moderate import, and that the lowest point of production was reached in the years when the largest amount of capital was brought to the country, and the highest in those years in which a very reduced amount reached these shores.

Although New South Wales cannot be regarded as the worst example of over-importation of money, its experience may be taken as typical of Australia. Going back thirty years, it will be seen that from 1870 to 1881 there was a gradual increase in the area of land devoted to the plough. During this period, the annual importation of capital on public and private account was about £1,500,000 per annum, and although it must be confessed that, in some years, especially towards the close of the period, more money was brought to the country than

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cou'd be conveniently absorbed, this was the exception and not the rule. During the whole period fair progress was made in rural pursuits, and in 1882 the area under crop was 660,000 acres. For the ensuing ten years the importation of capital averaged about £5,120,000 per annum, a prodigious sum considering the population of the state at that period ranged from 750,000 to about 1,000,000 persons. There can be no question but that £51,200,000 in ten years was more than New South Wales could conveniently absorb, and although there was a considerable increase of population the immigrants did not find employment in rural pursuits to any large extent, while many men engaged in farming and grazing were enticed from these primary industries to railway construction and works connected with city industries. The consequence is reflected in the returns relating to agriculture, for at the end of the t-n years, the breadth of land devoted to crops had increased to 846,000 acres, that is by 186,000 acres or 28 per cent., which must be regarded as a very insignificant result, seeing that in the interval the land sales were enormous, and population had increased nearly 50 per cent. For the year 1892 there was a falling off in the importation of money, and the bank crisis of 1893 put a stop to the importation of capital on private account, although the Government continued to borrow moderate sums until the year 1899. Taking the eight years from 1892 to 1899, the importation of capital of all kinds fell to an average of £1,300,000 per year, a sum well within the absorbing capacity of the country, while the breadth of land devoted to crops was increased three-fold. The year 1899 showed a total area of 2,439,000 acres under the plough, which is the maximum area that the state can show. Since 1899, there has been considerable borrowing by the state Government, and agriculture has slightly retrogressed; this is partly due to the adverse character of the seasons, but also, it must be confessed, to the alluring effect that an expansive public works policy has had on the minds of persons engaged in agricultural industries. Nor does the curtailment of expenditure have the effect of sending workers back to the land, for the common experience of Australia is, that men who have been enticed away from rural industries to the towns evidence great reluctance in returning to their former pursuits.

From the point of view of wages and cost of living, the greater part of this period was an extremely prosperous one, improving year by year from 1872 onwards. At no period, except in the five golden years, 1853-7, were wages so high, and at no previous period was the purchasing power of money so great. The tide of improvement reached its highest level just before 1885, and in 1886 the signs of a reaction were visible. This was unfortunately coincident with the fall in prices already spoken of. The profits of capital became reduced and employers immediately attempted to reduce wages. In 1886 and the five years following, many strikes and trade disputes occurred. In New South Wales, in 1886-87, work in some of the southern district collieries was suspended for nearly twelve months by strikes and disputes; in 1888 the coal

miners in the northern districts were on strike for several months; and in 1888 and 1889 the completion of various large public works threw out of employment some 12,000 men-no inconsiderable proportion of the unskilled labour of the country. In 1890 the maritime and pastoral industries were disturbed by strikes and disputes, very hurtful to the community in general and the working class in particular; and in 1892 another disastrous strike occurred, causing the silver-mines at Broken Hill to remain idle for nearly three months.

The bulk of the production of Australia is for export, and a very small proportion of the produce of the pastoral industry, with the exception of meat, is consumed in the country. The mineral products are also almost entirely exported, and there is a surplus production of bread stuffs. The prices, therefore, which the Australian producer can obtain for his produce are determined by prices and conditions in Europe or America, over which he can exercise little or no control. As a consequence, with a fall in prices of staple produce, employers almost invariably seek to balance their accounts by a reduction in wages; and under existing conditions it is practically necessary, if production is to continue, that the employees' wages should fall with the prices obtained for the commodity produced. In 1891 and the following years, Australia as a whole was face to face with a falling off in the quantity of production, and a decline in prices. The wage-earners were slow to concede the necessity of wages sharing in the general decline, and this was the root difficulty which caused the labour troubles preceding the crisis of 1893. It has been attempted in some quarters to fix upon the Labourers' Unions the responsibility for the events of that year. When it is remembered that the country was entirely over-capitalised, that land values had risen exorbitantly in the principal cities, and that the banks and financial institutions were largely concerned in maintaining the position of speculators, and were themselves, contrary to the spirit of the law and of their charters, the holders, either as mortgagees in possession or directly, of large squattages and landed properties in the cities and towns, it is easy to conceive that if the working classes had obediently acquiesced in all the demands for a reduction of wages, the crisis would still have happened. In the light of subsequent events, it must be confessed that the crisis was by no means the disaster which has been pictured. On the contrary, as will be seen from other parts of this volume dealing with the progress of production, all the producing interests of the state can look back to this time as a period of general awakening, and general production has made far greater progress since 1893 than ever before, in spite of adverse seasons and persistently low prices.

The flourishing condition of the pastoral industry throughout the greater portion of this period gave a marked impetus to the export trade. In 1872 the total value of the exports of the six states amounted to £32,212,000; this was an extremely large showing for a population of only 1,708,502. In 1875 the value of exports had grown to

£38,704,000, representing £20 11s. 3d. per head of population; in 1880 it reached £42,671,000 or £19 6s. 8d. per head of population; in 1885 it was £44,722,000 or £16 15s. 1d. per head; and in 1891 the total reached the enormous figure of £63,138,800, which is equivalent to £19 14s. per head of the population. These figures of course include re-exports and interstate trade; but when every allowance is made on these accounts it will still be found that the production of Australia, as measured by its exports, compared very favourably with that of any country in the world. The year 1891 represented the summit of Australian trade up to that time. In the following year there was a considerable falling off. This, however, was due more to the decline in prices than to any failure in production. The imports into Australia represent the return for the exports in addition to the proceeds of loans raised by the states and the investments made by foreign capitalists, less the interest and earnings of investments held by persons living outside its boundaries. The value of the imports fluctuates considerably, and in years of heavy borrowing shows very large figures; thus, in 1885 the imports exceeded the exports by £11,179,000, in 1889 by £9,305,000, and similarly in respect to other years.

After a long period of neglect the Governments of the various states began in 1873 to attend to the expansion of their railways. In 1872 the mileage in operation was 1,122; in 1874 it had risen to 1,346, and from this time onwards progress was rapid. Within four years the mileage open for traffic was doubled, and in ten years was quadrupled, the mileage in 1884 amounting to 5,694; and by the end of the period under consideration-that is, the year 1893-the length open for traffic exceeded 10,300 miles.

The expansion of general business during the same period may be gauged with considerable accuracy from the extension of the banking facilities. During the twenty-two years under review, banks were opened in every important centre of Australia, and it is estimated that in 1893 there was one bank or branch in operation for every 3,000 of the population. The deposits in 1872 were 23 millions; in three years they had increased 50 per cent; in seven years they had doubled; and in eleven years the increase was threefold-that is to say, in 1884 the sum on deposit reached £69,936,000. In 1891 the business of the banks reached its highest point, and the amount of money deposited was, in round numbers, 100 millions, equivalent to £31 4s. 2d. per head of population. This enormous sum, however, was not derived wholly from the Australian people, as large amounts were obtained in the United Kingdom and transmitted to Australia for investment. After 1891 the banking business slackened off, and in 1893 the great financial crisis occurred, of which mention has been made so frequently, and was accompanied by a very large withdrawal of deposits, chiefly by persons resident in the United Kingdon. In 1895 the amount on deposit was reduced to 86 millions, which included a considerable sum, estimated at about 54 millions, locked up in reconstructed banks. The

crisis of 1893 involved the suspension of thirteen banks, of which six had their head-quarters in Victoria, two in New South Wales, three in Queensland, and two in London. Coincident with the increase in the money placed with the banks of issue was a very large increase in the deposits in the Savings or people's banks. In 1872, the sum on deposit was £3,810,000; in 1880 it had risen to £5,867,000; in 1885 to £10,199,000; and in 1891 to £15,477,000. From this point it leaped to £18,100,000 in 1893, but the increase was not entirely due to working class deposits, as it represented to some extent money withdrawn from the banks of issue at the time of the crisis. At the highest point in the period, namely, the year 1893, the total deposits represented £5 9s. 5d. per inhabitant; and although this figure has since been greatly exceeded, it was considered at the time, and justly so, a tribute to the earning capacity of the Australian working population and an index of its material condition.

During the twenty-two years from 1872 to 1893 the population of Australia was practically doubled. The greater portion of the increase was due to births, the excess of persons arriving over those departing, though important in some of the states, being not very considerable for Australia, taken as a whole. Several of the states, notably New South Wales and Queensland, maintained the policy of assisted immigration during the larger portion of this term, and in New South Wales alone nearly 50,000 persons were introduced in the ten years preceding 1886, and in Queensland the average number per annum brought to the country at the public expense from 1873 to 1892 was 9,746. Various important changes took place in the positions of the states in regard to population. During nearly the whole of this period Victoria had the premier position, but at the close of 1891 New South Wales took the lead and South Australia yielded the third place to Queensland in 1884. Western Australia was still far in the rear. Established before any of the other states except New South Wales and Tasmania, the population of this huge province did not in 1893 amount to more than 65,000-a condition of affairs due almost entirely to its isolation and the absence of mineral discoveries. Western Australia was on the eve of reaping great benefits from its gold discoveries, but the record of these and of the great influx of population which resulted therefrom belongs to the succeeding period.

It is impossible within the limits of this chapter to give a statement of the wages paid in all industries, or even in the leading industries of the various states. The illustrations given are therefore confined to the rates paid in certain well-known trades, and these it is thought will indicate sufficiently well the general condition of wages in the other trades. In considering these examples it should be remembered that wages in Australia do not always indicate the condition of the productive industries of the country; and especially is this the case when, as from 1882 to 1889, the Governments of the states are large borrowers and large employers of labour. Wages, generally speaking, rose rapidly