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 preference
 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 confirmed
 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,