CONTINUOUS BORROWING 237 
ment of the national standard of living to its economic maxi- 
mum. The final form of the test to be applied, therefore, 
becomes a comparison between indebtedness as measured by 
the annual interest charge, and productivity as measured by 
the value of the disposable national income per head; and 
Dyason would seem to be guilty of a false economic emphasis 
when he regards the proportion between external debt and total 
wealth as the critical test to be applied to the public debt. This 
is the more remarkable since he does proceed to an excellent 
comparison of productivity, national dividend, and annual 
interest payments. 
The disposable income which is capable of application in 
discharging external indebtedness consists of those products 
which have been called in an earlier chapter foreign-trade com- 
modities. The Commonwealth Statisticians estimate of the 
value of Australian production is arranged in six divisions, viz. 
agricultural, pastoral, dairy, forestry and fisheries, mining, and 
manufacturing. Of these it is safe to assume that not more than 
10 per cent. of divisions IV and VI enter into foreign trade ; 
indeed from the calculation by Wickens noted previously this 
would appear to be a liberal estimate. The remainder of total 
production can therefore be accepted as a fair estimate, com- 
parable from year to year, of disposable income. The second 
table with this alteration. and brought up to 1927, is given on 
p. 238. 
From this analysis some very important results are to be 
obtained for the purpose of estimating the relative marginal 
productivity of the debt from year to year. and hence of 
Australia’s capacity to borrow. These may now be summarized: 
(i) The ratio of total debt to production rose from 10-8 to 
13-3 per cent. in the nine years. That is to say, the per- 
centage of that part of the national income used for 
paving for overseas debt increased by 23 ver cent. 
(ii) The ratio of the external interest to production, i.e. the 
ratio of annual overseas interest to that part of the 
national income available for that purpose increased by 
22-5 per cent. 
(iii) The ratio of the external debt to the whole national 
dividend rose from 3-5 to 4-6. an increase of 31 per cent.