DAYS OF TRIAL 297 



content to allow such an enormous addition to their municipal 

 taxation. With the cessation of borrowing in 1891 valuations 

 rapidly receded, and by 1898 they had been officially reduced by 

 quite one-third from the maximum figures. 



The deposits taken by the land-banking, finance-mongering, 

 mortgage and investment companies were squandered in vain efforts 

 to keep alive a belief in the profitable activity of the real estate 

 market ; in paying dividends to shareholders that were never earned ; 

 and in the maintenance on an extravagant scale of Boards of 

 Directors, and shoals of well-paid officials. Fully 5,000,000 of 

 debentures and deposits had eventually to be realised by the British 

 lender through the medium of official liquidators, and in some 

 instances the dividend was scandalously small. To the legitimate 

 borrowings of the Tramway Trust, the Harbour Trust and kindred 

 bodies no objection could be offered, for they had the ascertained 

 elements of recuperation within themselves. 



It is convenient to adopt the current formula in speaking of the 

 proceeds of this borrowing as money, though of course no portion 

 of the millions came out in cash. To a certain extent they increased 

 the available stock of metallic currency by taking the place of the 

 export of bullion. During the seven years under consideration the 

 imports of the colony reached the gigantic figure of 148,000,000 

 against 94,000,000 of exports. Quite one-fourth of the former 

 amount represented food and liquor, which found its way into ex- 

 travagant consumption amongst a community intoxicated with such 

 apparent abundance. In the same period the ordinary revenue of 

 the colony exceeded 53,000,000, or nearly 8,000,000 per annum, 

 all of which was freely spent in addition to the huge loan disburse- 

 ments. During the year 1887 the total deposits in the Australian 

 Banks increased by 12,000,000, while their total advances rose by 

 barely 3,000,000. It was plain to experienced bankers that these 

 accumulations could not be used with safety. Accordingly, during 

 this year they successively reduced the interest they allowed from 

 6 to 5 per cent, and then to 4 per cent. Unfortunately, this added 

 fuel to the speculative flame, by forcing dissatisfied depositors to 

 the building societies and land-jobbing companies, generally using 

 the word " bank " in their title, and which gave from 1 to 2 per 



