THE “NINETIES” SLUMP

Gisborne Times, Volume LXXII, Issue 11452, 28 February 1931, Page 12

THE “NINETIES” SLUMP

AUSTRALIAN HISTORY

HOW PROSPERITY WAS RESTORED.

The December issue of “The Wild Cat Monthly” (Sydney) published an interesting account of the financial crash of 1892 and the' subsequent recovery. '

Those who look for a rapid recovery in Australia are justified in dwelling a good deal upon th e recuperative power of Australia, observes the “Monthly.” A Vila t it did in the ’nineties was very astonishing, and there are valuable lessons for the present ill the history of that period. How did Australia then so quickly w'iu back its prosperity ?

Thq crash of 1892 differed in some respects from the-present crisis; but there are -many points of resemblance. The cause of the trouble fqHy years ago was heavy borrowing by banks ami other financial institutions from abroad, followed successively by a heavy fall in the price and value of Australian securities, and inability to realise and repay the debt. It had one great advantage over the present trouble: it was more obvious. The banks, building societies and Joan companies were chiefly affected, and one after another they closed their doors to depositors. There was no mistaking the meaning of that: there was no call- for ail Otto Niemeyer to diagnose that disease. For the same reason there was no delay in setting about applying remedies. There was no Frank Anstey to talk about the blessings of inflation: Australia knew it had too much inflation already. Instead it got down to hard productive work.

INCREASE IN SETTLEMENT. And circumstances favored it, as circumstances have a habit of doing in such cases. Th© laud had treated thousands very badly and prices were still very low. The average London prices of wheat per quarter (eight bushels) in-1891 was 375; by 1894 it was down to 22s lOd. Nevertheless, there was a great increase, of settlement by men who believed that, if the land did not offer a fortune, it at least offered a livelihood and independence, along with a fair chance of something better. Between 1881 and 1891 the area under cultivation in New South AVales had widened only from 578.000 to 840,000 acres; between 1891 and 1899 flier© was an increase to 2,441,000 acres. Twice as much new land was brought under cultivation in this'one State in those eight years as in the previous hundred years. For the entire Commonwealth the growth between 1881 and 1891 was 870,000 acres; in the next eight it was 2,301,000 acres. Of the total area of New South AVales in 1 SSI only .14 of 1 per cent, was under crop; in 1899 there was 1.23 per cent. In A ietoria, thanks mainly to the opening up of tho Ala lice, the proportion rose from 3.70 to 5.01 per cent.

Such a gruelling did the country get through drought, rabbits and overstocking in the late ’eighties and early ’nineties that Australia’s recovery could bo little helped by the pastoral industry. Actually the number of sheep in Australia and New Zealand fell from 124,547.000 in 1891 to 93.045.000 in 1899. But. although the pastoralist could not make his eaton-out country carry more stock, he could, and did. make it carry better stock. Meantime the frozen and preserved meat export trade was expanded. From Queensland frozen and and chilled meat of the value of £lOl. 345 had been sent away in 1-891. in 1899 th© figure bad reached £833,733. while the export of preserved meats from tho same State hud moved from £59,032 to £383,899.

WHAT MINING DID. Rut the mining industry contributed more than the pastoral industry to the quick return of prosperity. Though Broken Hill had been raked of its richest* ores in the four years 1890-94, and though the zinc-bearing sulphide ores were • still refractory, the export of silver-lead from NewSouth AVales never fell below £1,640.000 in the following six years. Gold was the largest contributor not only to the statistics of the period, but to its psychology. In tho decade of the 80‘s the Australian production had fallen to £49,210,000. In 1891-1900 the swift development of the AYestralian fields swelled the aggregate for th 0 decade to £89,999,000; and in the

next ten years the total was an amazing £142,009,109 —-which was 40 per cent more than tho total of tho golden ’fifties, when Ballarat and Bendigo, and all the oilier storied diggings, were at. tlipir height. Further, it was not to large things only that attention was given, in 1891 tho export of butter from New South Wales to- Britain amounted to 381,0001 b. By-1899 it was 7,000,000

lb. South Australia added more than 50 per cent to her area under pvines. * I Meantime,’ with the help of State tariffs, not always effective, but generally more protective than they had been, there was-, especially in the later ’nineties', very considerable increase in factory -employment. Alter the crash there was, as thero is now, a serious shrinkage. Hands employed in Victoria .'had totally 57,432 in 1899; in 1893 th© figure shrank to 39,473. By 1899 it was (30.700. In New South Wales there was a movement from 38.918 (1893) to 55,040 (1899) ; in the other colonies from. 13,309 (1893) to 27,200 (1899). j • It is significant that during the period of distress no attempt was mado to increase Government revenue in older, to provide employment on public works. Tho public ..revenue per inhabitant of tho Commonwealth hail been exactly £B. in 1890, and it> was £7.105. 2d. in 1891—they were the two boom years. In 1594; and-1895,/two very black years, it was £0 19s and £G 19s 3d respectively.-In New,South AVales tlm gradual reduction was from £8 Its Id in 1891 to, £7 Is 6d in 1890. Tho whole .puropse of th© policies pursued during that period .was tlio increase of production. It was realisedthat!'relief works, instead of. leading I

tho country out of its troubles, only led further into them by throwing a double burden on to such production as there was. Whether we shall- so quickly emerge from our present difficulties'depends mainly upon the period it takes us to learn that lesson-