THE BALANCE OF INDEBTEDNESS, 1918-28 211
has been deemed of sufficient importance to call for special con-
sideration.
As in the pre-war period the receipts from Australian capital
invested abroad were not of a high order, although it was evident
that the amount is steadily on the increase. On the basis of the
excess of the receipts from overseas over the expenditure over-
seas by life assurance and other companies, rates of dividends
in tin, rubber, and other concerns, and other related data, the
computation shown in the interest column under ‘credits’ in the
final table was made. It is, admittedly, not much more than
conjecture.
The completed balance of international indebtedness is of
more than ordinary interest. Notwithstanding the disjointed
nature of the period, and despite the adjustments made necessary
by the return to gold, the situation revealed by the table is
precisely what orthodox theory would lead us to expect. The
mechanism of adjustment varies in no important respect from
that indicated by the pre-war balance of indebtedness. Setting
the two main facts of this last phase of the investigation side by
side, the following comparison is obtained for the whole period
1920-28 -
Tora oF OVERSEAS LOANS.
Government
Municipal .
Business . .
Private ‘ . . “
Capital imported . . 266
.
£m.
210
16
28
DIFFERENCE BETWEEN INTERNATIONAL
DEBTS AND CREDITS,
Total debits
Total credits
£m.
1635
1360
Excess of debits
, . . 278
The discrepancy of approximately £9 millions can be partly
reconciled. The calculation is taken to 30 June 1928; and the
first half of this year was a period of relatively heavy loan issues.
At the end of the half-year London banks held about £3-5 millions
of unexpended loan balances in connexion with loans floated by
the Commonwealth for the States, and this amount, of course,
would not show in the total of imports. The surprising feature
of the whole balance of transactions is once again the rapidity
and accuracy with which loans become translated into imports
of all kinds, both services and commodities.
