234 THE ECONOMIC EFFECTS OF 
arguments already put forward relating to the depression of 
saving power, the lowering of productivity, and the decline in 
managerial efficiency owing to continuous loans. 
Criticisms of Australian public indebtedness usually measure 
the weight of the burden by reference to its effect on national 
solvency. While that extreme standpoint may be justified, it is 
to be observed that there are many degrees between buoyant 
prosperity and utter bankruptcy. The question for the econo- 
mist is not whether Australia can afford the annual interest 
charge ; but, rather, whether her economic organization would 
operate more effectively by utilizing a little more or a little less 
of capital in combination with her labour and resources. It is 
conceivable, indeed highly probable, that the decision to fore- 
swear foreign borrowing entirely, if that were a practicable 
policy, might ultimately be compensated to some extent by a 
stimulation of national enterprise, by an increase in efficiency 
and productivity, by avoiding the economic dislocations con- 
sequent upon interruptions in the flow of foreign capital, and by 
consequently increased stability in business. But the charge 
apon the capital already invested in the country would have to 
be met in perpetuity, or until such time as the debt was repaid. 
A discussion of borrowing policy can therefore have meaning 
only in regard to the most expedient policy for the future. 
The present situation has been very clearly presented by 
Mr. E. C. Dyason,! by means of a comparison of the public debt, 
and in particular the external debt, with the other factors in 
the national economy ; and his conclusions form an important 
contribution to the study of the national debt. His first com- 
parison is based upon the public debt in relation to the wealth 
of Australia; and his summary table, brought up to the year 
1928, is given on p. 235. 
Dyason takes the view that the most weighty consideration 
for the purpose of estimating the soundness of the financial 
position concerns the proportion of the external debt to the 
total of public and private wealth. Admittedly this would be 
a weighty consideration in direct proportion to the degree of 
accuracy with which the total wealth could be computed. But 
it is to be thought that, despite the advance made in statistical 
Sechnique in the interim, Basfable’s dictum is still substantially 
! E. C. Dyason, ‘The Australian Public Debt’, The Economic Record, Nov. 1927.