Borrowing and business in Australia

Bibliographic data

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

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part IV. The commonwealth, 1900-14

Collection:: Economics Books

INDEBTEDNESS FROM 1900 TO 1913 157 that the amount of privately invested capital rose from £125 to £150 millions between 1900 and 1913. In order to determine the amount of the return upon this capital the average rate of interest upon capital invested during the period was estimated from various sources, and the computation is presented in the next table. TasLE XXXV Estimated Rate of Return on Private Capital Year. 301 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911. 912 1913 Lehfeldt.t 3-4 3-2 3-2 3-8 3-8 2-9 1.0 £0 £0 1-2 J 2 Australian productive activity 2 00 23 27 19 31 42 34 128 138 Average of 12 companies.’ 4 5-0 0 8 0 3-0 56 55 51 52 55 5:2 54 Estimated Average. “4 4-0 3-5 42 4 1.7 1.8 , 2 1-8 £9 5-4 3.9 3:0 The estimates made by Lehfeldt based on the return for prefer- ence and government stocks issued in London have little bearing upon the immediate problem ; but they are of interest in marking the general trend of interest rates during the period, and the minimum return which might be expected upon capital. The steady increase in productivity as indicated by the official index of productive activity, and the ready market which existed for Australian loan issues, would seem to indicate that a fairly high relative rate of interest might be expected ; and this was con- firmed by the analysis of the dividends of twelve representative companies. The estimate of average yield can, therefore, scarcely be considered too high in the light of all the circumstances of the time. It now remains to estimate the total of interest 1 Lehfeldt, ‘The Rate of Interest on British and Foreign Investments’, Journal of the Royal Statistical Society, Jan. and Mar. 1913. ? Commonwealth Bureau of Statistics, Labour Report No. 13, p. 88. 3 From Insurance and Banking Record, for 2 banks, 3 mercantile agencies, 2 life and fire assurance companies, 2 mining companies, 3 industrial companies,

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