CONTINUOUS BORROWING 239 
productivity of the overseas debt. The increase in the per- 
centage of the disposable income necessary to pay the annual 
overseas interest charge is the most serious aspect of the situa- 
tion. While the analysis does not indicate that the proportion 
of the disposable income which is used to hire capital is un- 
duly high, since production itself rose during the period by 32 
per cent., it does indicate the real crux of the external debt 
situation. 
A second point established by Dyason has reference to the 
relative proportion of external debt to production in the pre- 
war and post-war periods. It must again be emphasized that 
Tare LVI 
Bxternal Interest and Productivity per Head 
§-year 
veriod. 
1910 to 
1914. | 
1923 to 
1997 
dverage annual 
production of 
export com- 
modities. 
Mean 
vopulation. 
Millions} 
14R 
4-657 
987 
| 5-929 
Increase per cent. 
Annual average 
production 
of export 
sommodities 
per head 
at pre-war 
mprice-level. 
30-3 
32-3 
6-6 
Interest 
on the 
ternal 
debt. 
2.119 
16-456 
Baternal 
interest 
charge 
per head 
at pre-war 
nrree.devel. 
1-6 
2.7 
68-0": 
the value of total production does not seem so important for this 
purpose as the value of the production of export commodities. 
It would appear to be necessary to compare pre-war and post- 
war interest and disposable income at a common price-level. The 
picture then assumes a somewhat different complexion, for it 
is evident that, while the annual average production per head 
of export commodities increased by. 6-6 per cent., the external 
interest charge had increased by 68 per cent., or more than ten 
times as fast. 
By a further comparison of annual indebtedness due to 
borrowing with the estimated annual savings, Dyason arrives at 
the final decision that Australia is living well within her income. 
Admittedly this may be true, although the estimate of national 
savings made by Sutcliffe upon which he bases his judgement 
remains the most conjectural and the least satisfactory aspect