294 A HISTORY OF THE COLONY OP VICTORIA 



It would be a fair ground on which to examine the charge of 

 reckless and unwarranted borrowing if the seven years, 1885-91 

 inclusive, were made the specific arena. The commencing date 

 was the last year of the Service coalition Ministry, the third in 

 succession of political peace and material prosperity. The two 

 years preceding it and the two that followed were notable for 

 exceptionally abundant harvests. Though the addition to the popu- 

 lation in the two preceding years by immigration had been under 

 20,000, yet in that same period the average deposits in the Victorian 

 banks of issue increased nearly 5,000,000, while the savings banks 

 showed a simultaneous rise of 50,000. The large amount of avail- 

 able credit balances, so far mostly the result of genuine labour, 

 brought many prospective buyers into the market, and led to a 

 rapid enhancement in the valuation of houses and land in the 

 Metropolis and more popular suburbs. This activity in values 

 received a further stimulus in 1885 by the commencement of the 

 construction of the tramway lines in Melbourne, not only by 

 promoting suburban settlement, but also in the meantime by the 

 housing and feeding of a large number of working men and their 

 families, attracted by the reputation Melbourne then enjoyed of 

 furnishing abundant employment. 



Thus in adopting 1885 as the starting-point it will be seen that 

 it approached the high- water mark of a period of business prosperity 

 which had so far been unforced by any prodigal Government ex- 

 penditure. Although there was a large amount of dealing in real 

 estate at advancing prices, the mania had not yet seduced the com- 

 munity into that fever of riotous speculation which transformed 

 " Broken Hill " into a synonym for illimitable wealth. As the 

 year progressed there were portents of a coming change, and the 

 sanguine were pawning their future to buy for the rise. 



Taking 1891 as the closing period is justified by the fact that 

 during that year the failure of many financial companies both in 

 Melbourne and Sydney was so manifestly the prelude to a wide- 

 spread liquidation, that the raising of further capital abroad was 

 rendered almost impracticable. Indeed, the amount so secured 

 during 1891 had not been large, for the great Baring crisis at the 

 end of 1890 had given a sudden check to the prodigal lending of 



