CONTINUOUS BORROWING 227 
being a mistake or a hindrance to Australian industrial and 
financial progress, has been the principal means whereby our 
productivity, and consequently our standard of living, has been 
so markedly improved.! 
(v) That the increased productiveness made possible by 
means of overseas loans is more than proportionate to the 
increase in the annual liability for interest. 
(vi) That ‘the vast potentialities awaiting development in 
Australia’ represent a responsibility for which Australia must 
be prepared to account to an overcrowded world ; and that, for 
political as much as for economic reasons, Australians are 
compelled to assume the burden of accelerated development. 
The urgency of the case leaves no alternative to the policy of 
borrowing for developmental purposes. 
(vii) That Australia’s capacity to borrow, as judged by her 
ability at all times to make prompt payment of the interest on 
overseas debt, is unimpeached. This readiness and ability 
‘honourably to meet all obligations’ is the most practical test 
of the economic soundness of any community 2 
(viii) That the resources awaiting development in Australia 
are complementary to the capital seeking investment in Great 
Britain; and that both stand to gain by a policy of keeping 
capital within the Empire. ‘Investing British’ is our soundest 
defence against the economic aggression of competing national 
groups. 
(ix) That the constant liability for interest imposed upon the 
community as a result of the long-continued loan policy, just 
as the hire-purchase contract is to the private citizen, con- 
stitutes a continuous spur to endeavour, and an insurance 
against ‘slacking’. The community is thus kept in a state of 
efficiency, and productivity maintained at its maximum, at 
least for those industries which contribute to the products 
acceptable for overseas payments. 
(x) That the co-operation of the foreign investor results in 
greater security, efficiency, certainty, and ease in budgeting for 
the financial necessities of the Commonwealth and the States; 
{ Johnston, op. cit., p. 3. 
! Bastable, Public Finance, p. 661: ‘The best support for the policy of paying 
in full is derived from the economic advantage that a reputation for honesty secures 
“in the long run”’, and nations have a far greater interest than individuals in paying 
attention to what happens “in the long run.’