Borrowing and business in Australia

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Monograph

Identifikator:: 183051623X

URN:: urn:nbn:de:zbw-retromon-222122

Document type:: Monograph

Author:: Wood, Gordon L. http://d-nb.info/gnd/1239193688

Title:: Borrowing and business in Australia

Place of publication:: London

Publisher:: Oxford university press, H. Milford

Year of publication:: 1930

Scope:: xv, 267 Seiten; graph. Darst.

Digitisation:: 2022

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part III. The boom of 1890 and its economic consequences

Collection:: Economics Books

84 IMPORTATION OF CAPITAL INTO the margin between the value of exports and the liability for interest was becoming narrower through the operation of the price-level even by 1890, since a diminution of prosperity equal to £4 per head of the population had occurred, a decline that was sufficiently serious without the intervention of other factors. Examination of the figures presented with this chapter shows clearly that neither the growth of population nor the expansion of production kept pace with the increase in indebtedness. The amount of the debt and the annual liability for interest are the two aspects still necessary to conclude the survey. Coghlan estimates that, by 1890, the total private payment of interest abroad for New South Wales alone amounted to not less than £2.75 millions, in addition to £1-75 millions on the public debt or £4-5 millions in all.l If £2-75 millions represented the interest on private debt and this was the average rate of interest for the whole of the six colonies, the annual interest bill at this time sxceeded £9 millions. Adding this to the £6 millions payable on the public debtit is clear the total interest payable on both the private and public debt of Australia amounted to, at least, £15 millions. Other estimates made at the time, based on different data, agree so closely with this total that it may be accepted with confidence? Allowing for that proportion of the private debt which was purely speculative in character, the community was faced with an annual interest bill amounting to not less than £15 millions. A very interesting comparison of the pro- sressive balance available for meeting the overseas debt can now be extracted from Coghlan’s figures. Tasre XIII Progressive Balance available for Interest (In Millions Sterling) 1861. | 1871. | 1881. 1891. Total exports . . . . . Aggregate interest on whole debt ; Balance available . . : y ’ Percentage exports needed for interest Percentage exports available to buy imports 16:6 | 231 | 312 2:0 40 | 8-0 46 | 191 | 232 1° 17 26 88 83 "4 36-3 15-0 21-7 41 89 1 Wealth and Progress of New South Wales, 1892. 2 Reginald Black estimated the total public and and £400 millions. private debt at between £350

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