In the wiki mises,
http://wiki.mises.org/wiki/Australian_banking_crisis_of_1893
the article fails to provide a plausible explanation of the 1893 banking crisis. Worse, the main source is from Hickson and Turner. If you want to know more about the australian free banking episode, I wrote a post here.
If the overexpansion cannot account for the boom in the late 1880s, one question still remain. How has the boom been financed ? Selgin, in “Bank Lending ‘Manias’ in Theory and History” (1990), may have the final words. Pope’s annual data, presented graphically (1989, p. 20, fig. 8), are more plainly inconsistent with the overexpansion hypothesis. According to Pope’s chart, in the seven years preceding the crisis the average reserve ratio of the 13 banks that survived the crisis varied from about 0.17 to about 0.19, with no apparent trend. The average ratio of the 13 suspended banks actually rose steadily from about 0.15 to about 0.16. These figures are consistent with the decline in Australian lending rates during the period in question. [...] The boom was financed, not by any increase in the bank money multiplier, but by injections of high-powered money from Austra-lian gold mines and from the British capital market. [13] When injections from Britain came to a sudden end with the Barings Crisis of 1890, many Australian banks were obviously unprepared; but this did not make them guilty of having lent excessively and “irrationally” during the boom years. (pp 275-276) Hickson and Turner ironically give some support for the evidence brought by Selgin (1990) when they wrote : “However, by 1891, the ‘zombie’ land mortgage companies were no longer able to survive as the inflow of British deposits dried up. Correspondingly, the commercial banks were forced to ration credit to land mortgage companies due to the increased cost of raising deposits in Britain. As a result, from 1891 to March 1892, in Melbourne and Sydney alone, deposit-taking building or land finance companies failed”.
If the overexpansion cannot account for the boom in the late 1880s, one question still remain. How has the boom been financed ? Selgin, in “Bank Lending ‘Manias’ in Theory and History” (1990), may have the final words.
Pope’s annual data, presented graphically (1989, p. 20, fig. 8), are more plainly inconsistent with the overexpansion hypothesis. According to Pope’s chart, in the seven years preceding the crisis the average reserve ratio of the 13 banks that survived the crisis varied from about 0.17 to about 0.19, with no apparent trend. The average ratio of the 13 suspended banks actually rose steadily from about 0.15 to about 0.16. These figures are consistent with the decline in Australian lending rates during the period in question. [...] The boom was financed, not by any increase in the bank money multiplier, but by injections of high-powered money from Austra-lian gold mines and from the British capital market. [13] When injections from Britain came to a sudden end with the Barings Crisis of 1890, many Australian banks were obviously unprepared; but this did not make them guilty of having lent excessively and “irrationally” during the boom years. (pp 275-276)
Pope’s annual data, presented graphically (1989, p. 20, fig. 8), are more plainly inconsistent with the overexpansion hypothesis. According to Pope’s chart, in the seven years preceding the crisis the average reserve ratio of the 13 banks that survived the crisis varied from about 0.17 to about 0.19, with no apparent trend. The average ratio of the 13 suspended banks actually rose steadily from about 0.15 to about 0.16. These figures are consistent with the decline in Australian lending rates during the period in question. [...]
The boom was financed, not by any increase in the bank money multiplier, but by injections of high-powered money from Austra-lian gold mines and from the British capital market. [13] When injections from Britain came to a sudden end with the Barings Crisis of 1890, many Australian banks were obviously unprepared; but this did not make them guilty of having lent excessively and “irrationally” during the boom years. (pp 275-276)
Hickson and Turner ironically give some support for the evidence brought by Selgin (1990) when they wrote : “However, by 1891, the ‘zombie’ land mortgage companies were no longer able to survive as the inflow of British deposits dried up. Correspondingly, the commercial banks were forced to ration credit to land mortgage companies due to the increased cost of raising deposits in Britain. As a result, from 1891 to March 1892, in Melbourne and Sydney alone, deposit-taking building or land finance companies failed”.
So I think the mises article needs a "revision".
You understand that...you can edit the wiki yourself, right?
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"Even when leftists talk about discrimination and sexism, they're damn well talking about the results of the economic system" ~Neodoxy
Yeah, as I've noted at the time on the Talk page, that particular crisis is not very clear according to the sources (plus it's basically copied from Wikipedia anyway). If you have the sources at hand, please go ahead and edit it!
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When i tried to edit the text, I got the following message :
"You do not have permission to edit this page, for the following reason:
The action you have requested is limited to users in the group: Users."
Sorry, but we had to introduce some restrictions due to the amount of spam. Please create a user and you'll be able to edit.
Ok, it's done. But you should check whether my english is good enough.
Your English seems to be quite fine, feel free to add some more stuff. :)