THE “’NINETIES” SLUMP

Nelson Evening Mail, Volume LXIV, 3 January 1931, Page 2

THE “’NINETIES” SLUMP

AUSTRALIAN HISTORY

HOW PROSPERITY WAS RESTORED

The December issue of “The Wild Cat Monthly” (Sydney) publishes 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 the recuperative powers of Australia, observes the “Monthly.” What it did in the ’nineties was very astonishing; and there are valuable lessons for the present in the history of that period. How did Australia then so quickly win back its prosperity? The crash of 1892 differed in some respects from the present crisis; but there are many points of resemblance. The cause of the trouble 40 years ago was heavy borrowing by banks and other financial institutions from abroad, .followed successively by a heavy fall in the price of commodities, uneasiness abroad as to the value of Australian securities, and in ability to realise and repay the debt. It had one great advantage over the present trouble; it was more obvious. The banks, building societies, and loan companies were chiefly affected, and one after the other they closed their doors to depositors. There was no mistaking the meaning of that: there was no call for an Otto Njomeycr 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 had too much inflation already Instead it got down to hard productive work. INCREASE IN SETTLEMENT And circumstances favoured it, as circumstances have a habit of doing in such cases. The land had treated thousands very badly, and prices were still very low. The average London price of wheat per quarter (eight bushels) in 1891 was :!7s; by 1894 it was down to 22s lOd. Nevertheless there was a great increase of settlement by men who believe that, if the land did not offer a fortune, it at least offered a livelihood and independence, along with fair chances of something better. Between 1881 and 1891 the area under cultivation in New South Wales had widened only from 578,000 to 840,000 acres; between 1891 and 1899 there was an increase to 2,441,000 acres. Twice as much new land, was brought under cultivation in this oqe 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 3,301,000 acres. Of the total area of New South Wales in 1891 only .44 of 1 per cent, was under crop; in 1899 there was 1.23 per cent. In Victoria, thanks mainly to the opening up of the Mallee, 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 be 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 eaten-out country carry more stock, he could and did make it carry better stock. Meantime the frozen and preserved meat-export trade was steadily expanded. From Queensland frozen and chilled meat of the value of £101,345 had been sent away in 1891; in 1899 the figure had reached £833,733, while the export of preserved meats from the same State had moved from £59,032 to £383,899.

WIIAT MINING DID But 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-hearing sulphide ores were still refractory, the export of sil-ver-lead from New South Wales never fell below £1,040,000 in the following six years. Gold was the largest contributor not only to the statistics of the period, but to its psychology. In the decade of the ’eighties the Australian production had fallen to £49,210,000. In IS9I-1900 the swift development of the Wcstralian fields swelled the aggregate for the decade to £89,999,000; and in the next 10 years the total was an amazing £142,009,109 —which was 40 per cent, more than the total of the golden ’fifties, when Ballarat and Bendigo, and all the other storied diggings were at their height. Further, it was not to large things only that attention was given. In 1891 the export of butter from New South Wales to Britain amount to 381,0001 b. By 1899 it was 7,000,0001 b. South Australia added more than 50 per cent, to her area under vines.

Meantime, with the help of State tariffs, not alwavs effective, but generally more protective man they had been, there was, especially in the later ’nineties, very considerable increase in factory employment. After the crash there was, as there is now, a serious shrinkage. Hands employed in Victoria had totalled 57,432 in 1889; in 1893 the figure shrank to 39,473. By 1899 it was 00,070. 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), It is significant that during the period of distress no attempt was made to increase Government revenue in order to provide employment on public works. The public revenue per inliabianl of the Commonwealth had been exactly £8 in' 1890, and it was £7 16s 2d in. 1891—they were the two boom years. In 1894 and 1895, two very black years, it was £6 19s and £6 19s 3d respectively. In New South Wales the gradual reduction was from £8 11s Id in 1891 to £7 Is 6d in 1896. The whole purpose of the policies pursued during that period was the increase or production. It was realised that relief works, instead of leading the country out of its troubles, only led further into them by throwing a double burden on to such production as there was. Whether wo shall so quickly emerge from our present difficulties depends mainly upon the period it takes, us to learn that lesson.