Finance, Politics, and Imperialism: Australia, Canada, and the City of London, C. 1896-1914

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Andrew Dilley, Finance, Politics, and Imperialism: Australia, Canada, and the City of London, c. 1896-1914 (Basingstoke: Palgrave Macmillan, 2012), 280 pp. Cased. £55. ISBN 978-0-23022203-8.

Andrew Dilley has produced an excellent study of the meshing of politics and finance in the 'long Edwardian period'. At a time when Britain was the world's pre-eminent creditor, the voracious appetite of settler societies for capital bound them closely to the City of London. Australia and Canada, both prominent borrowers, provide revealing contrasts. By the first years of the new century Canada was experiencing a boom centred on western settlement and railway building. Laurier, seeking an answer to western grievances over the Canadian Pacific Railway, embarked on a programme of rail building that was to saddle Canada with three transcontinental rail systems and a legacy of heavy debt. Belief was widespread that British capital was vital for Canadian development and that nothing should jeopardise its continued flow. A small but immensely powerful business elite hammered home the message that priority must be given to keeping Canadian credit high. United States capital was also flowing into Canada but business groups tended to favour London because American direct investment threatened their hegemony while British portfolio investment kept power in Canadian hands.

Australians were far more sceptical about overseas borrowing. The major phase had occurred in the 1870s and 1880s. Depression in the 1890s, a banking crisis in 1893 and severe drought around the turn of the century limited the demand for new funds apart from mineral-related investment in Western Australia. The earlier borrowing lefta heavy burden of debt servicing and contributed to a much more critical view of the value of overseas investment and the 'tribute' it engendered. Business elites were more diffuse and less prominent than in Canada, leaving greater scope for other viewpoints. …