compared with 709,479 acres in Victoria, and 1,267,482 acres in South Australia. The smallness of the population in Western Australia precluded any attempt at cultivation on a large scale, while Tasmania, with its small home market, and entrance barred to the markets across the straits, made very little progress, the area under crop in 1893 being only 179,000 acres, as compared with 156,000 acres twenty years previously. So early as 1852, South Australia had produced sufficient wheat for its own requirements, and was exporting its surplus, part to Great Britain, and part to New South Wales and other states with deficient production, while, so far as foodstuffs were concerned, Victoria also became independent of outside assistance in 1877. The value of the country's production, however, is not to be estimated merely by the acreage under crop. The maize and sugar crops of New South Wales, estimated by their yield, would represent four times their area in wheat land. A more exact idea of the condition of the agricultural industry may be obtained from the figures relating to the value of production. Judged by this standard, the production of Victoria stood easily first during the whole period, while New South Wales and South Australia, with almost equal values, were second and third. In 1871 the return from agriculture in the Commonwealth States was £8,941,000, equivalent to £5 7s. 2d. per inhabitant; in 1881 the value had increased to £15,519,000, or £6 17s. 9d. per inhabitant; while in 1891 the production reached £16,480,000, or £5 3s. 6d. per inhabitant. This satisfactory result was obtained in spite of a fall of about one-third in the prices of agricultural products. Further details in regard to agriculture will be found in the chapter dealing specifically with this question.

When the development of the pastoral industry during this period is considered, it will be readily understood how it happened that certain states, well fitted for agriculture, showed comparatively little progress in the breadth of land brought under tillage. Leaving aside for the present the question of prices, and considering only the volume of production, it will be found that this period was the one, of all others, most favourable to the pastoral industry. Taking Australia as a whole, the following figures, giving the number of cattle and sheep and the weight of the wool clip at various periods, illustrate the position of the industry :-

The favourable position of the pastoral industry was maintained almost throughout the period in spite of a considerable fall in the prices

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of the staple articles of production, This was especially the case in New South Wales and Queensland. In New South Wales the wool-clip in 1871 weighed about 74,000,000 lb.; in 1892 it was nearly five times that weight. In Queensland the chief interest was cattle-grazing, and the number of cattle increased nearly sixfold in twenty years—that is to say, from 1,168,000 in 1871 to 6,192,000 in 1891. The first check to this prosperous state of affairs was brought about by the fall in prices., High prices for all classes of local produce obtained in 1875; but from that year to 1877 there was a reduction equal to about 14 per cent. Nevertheless, at the reduced prices the industry was highly profitable, especially as the flocks tended to increase largely in numbers. prices prevailed until 1884, but there was a further fall of 16 per cent. in the ensuing two years. In 1886 the country began to feel the effects of price reduction, which almost counterbalanced the larger returns due to the increase in the number of stock depastured. From 1886 to 1890 prices continued with little change, but from 1890 to 1894 there. was a steady decline, the fall in the four years being equal to 30 per cent. During the nineteen years, 1875 to 1894, the total decline was equivalent to 49 per cent., and affected all descriptions of pastoral products; and as there was no corresponding reduction in the cost of production, and little in the cost of transport, the reduced prices proved a very severe blow to the staple industry of the country.

The various manufacturing industries prospered over the greater portion of this period. The number of hands employed in Victoria in 1873 was 24,495; in 1880 the number had increased to 38,141; in 1885 to 49,297; and in 1889 to 57,432. This was the year of greatest prosperity in Victoria. Thenceforward the manufacturing industry greatly declined, and in 1893 the number of hands employed was 39,473, or no greater than in the year 1883. In New South Wales, also, there was considerable impetus given to the manufacturing industry, which in 1889 gave employment to 45,564 persons; but, influenced by the same causes that affected Victoria, the number of persons employed fell away in 1893 to 38,918.

In the earlier years of the period the expenditure of borrowed money by the states was very moderate; but as money became easier to obtain in the London markets, the various Governments availed themselves of their opportunities to the fullest extent. The public debt of New South Wales in 1871 stood at about 10 millions; in 1881 it was still below 17 millions; from 1881 to 1891 it rose to 53 millions, showing an increase of 36 millions in ten years. During the greater part of this period New South Wales had an abundantly large land revenue, which was expended for current purposes; this, added to a huge loan expenditure, rarely less than £4,000,000 a year, gave the state a predominating influence in the labour market of the continent.

In Victoria there was much the same condition of affairs, except that the Government had not any considerable revenue from the sale of its

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public lands. In 1871 the public debt in Victoria stood at 12 millions in 1881 at 22 millions, and in 1891 at 43 millions. In some years, considering the number of the population, the loan expenditure was prodigious, although never on so lavish a scale as in New South Wales. The largest outpouring in any one year from loan funds was in 1890, when £4,134,000 was expended. Queensland also indulged in borrowing on a scale much beyond its requirements. From 1872 to 1882 the expenditure from loan funds was nearly £900,000 a year. From 1882 to 1892 it averaged between one and two millions. In South Australia the state expenditure from loans during the period 1872 to 1892 was scarcely ever less than one million a year, in some years rising to as much as 13 million. Western Australia was the only state in which the loan expenditure was kept within reasonable proportions, its total debt in 1891 being only £1,613,000. In Tasmania, from 1880 to 1890, 44 millions was added to the public debt, expenditure slackening off after 1891.

In the eastern states the year 1892 was the first to show a restricted loan expenditure, the total for the five states, which in 1889 had been over 11 millions, and in 1890 about 10 millions, falling to less than 3 millions--equivalent to a shrinkage of at least 7 millions. This sudden contraction of expenditure had a most serious effect upon the labour market, and at least 40,000 men, accustomed to look to the Government or to contractors working under the Government for their employment, were thrown upon the labour market, which immediately became disorganised. Indeed, so far as New South Wales was concerned, the labour market was disorganised even in 1888, a state of affairs which did not altogether result from the cessation of expenditure on public works. Large numbers of persons had been attracted from the other states by the extravagant expenditure and vigorous immigration policy of preceding years, and on the Government reducing their expenditure from extravagance to moderation, thereby involving a decrease of about three millions sterling, some 15,000 men were left without employment. To mitigate the distress consequent upon the inability of the community to absorb so much labour thus thrust upon it, the Government started relief works, still further attracting the unemployed to the vicinity of Sydney, and an expenditure of nearly £400,000 was incurred upon useless works before they were abandoned.

As affecting the industrial condition of the country, the importation of private capital for investment, in addition to that brought by persons taking up their abode in the state, was almost as important as the introduction of money by the various state Governments and by the local governing bodies. During the twenty-two years under review, the amount of private capital sent to New South Wales for investment, in excess of what was withdrawn, amounted to some 19 millions, and the money brought by persons coming to the country was over 23 millions. bulk of the capital sent for investment came within the five years 1886-1890, and with the assistance of what was expended by the state

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during the same period and the preceding one, helped to bring about the industrial inflation so characteristic of those years. The investments made during 1871-1885 in Victoria by persons outside that state were very moderate in their amounts, and were probably not greater than the investments of Victorians in other states. During the years 1886-1890, entirely different conditions prevailed. In the short period of five years the private capital introduced or withdrawn from investments outside the state exceeded £31,500,000—a prodigious sum when the population of the state is considered; and when it is remembered that during the same five years the borrowings of the state Government and of the local bodies exceeded 17 millions, it is easy to understand the extraordinary inflation which arose, especially in Melbourne and the surrounding district. Every branch of industry was affected by the large amounts of capital available in the Melbourne market, and wages, rent, and the price of land reached very high figures. Speculation was. carried on to the point where it became gambling, and all classes of real property assumed fictitious values. As illustrative of this, it may be mentioned that the rental value of Melbourne and suburbs during the boom period was £6,815,315, which became reduced when the boom collapsed in 1893 to £5,847,079. In Sydney the inflation brought rental values of the metropolitan district to £6,067,882, which was reduced by the year 1897 to £5,022,910. All the states except Western Australia and South Australia were the recipients of the attention of the British investor. Queensland received nearly nine millions of private capital in the five years 1881-85, large investments being also made in the immediately preceding quinquennial period. From 1885 onwards, however, there was a tendency in Queensland to withdraw capital. Tasmania received about one million pounds during the five years 1871-1875 for investment on private account, and in the subsequent five-yearly periods the amount invested varied between £400,000 and £500,000. These sums were not larger than the island state could readily absorb. There can be no doubt whatever that during many years Australia received more capital, both public and private, than could be legitimately utilised, and no small portion of it was necessarily devoted to purposes purely speculative. Many persons became suddenly rich by land speculation; on the other hand, as the land which they sold had a productive value far short of the interest represented by the purchase money, many of the purchasers, of whom there were thousands, became embarrassed, and it was some years before they could free themselves from their difficulties. The financial institutions, which had greatly assisted to promote the speculations, became involved also, and by the failure of their customers to redeem mortgages, these institutions, including several of the banks, became the possessors of a large amount of property on which advances had been made beyond all possibility of recovery. There was, however, an evil of greater consequence than the temporary inflation of values. It will be readily conceived that the introduction of capital within the limits of absorption,

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