23. It has, we understand, been decided to complete the Hume 
Dam at an estimated cost of £4,000,000 to its full height as recom- 
mended by the engineering advisers of the Governments concerned ; 
and meanwhile the Murray River Advisory Committee has been 
sntrusted with the by no means easy task of advising on the ques- 
tion to what purposes the new areas of land, which will be made 
irrigable by means of the Hume Reservoir, can be profitably put, 
having regard to the difficulty of disposing of the produce from the 
irrigation areas already existing, and on the extent to which any 
profits which may fairly be anticipated from the new irrigable 
areas will outweigh the loss which must be occasioned by the sub- 
merging of valuable land already in use above the site of the Hume 
Reservoir, when the dam is completed. We cannot avoid the 
conclusion that much loss, now inevitable, would have been 
avoided if the whole series of problems involved in this scheme had 
been more exhaustively investigated at the outset. Even now it 
would seem worth while to consider whether the risk of loss in- 
volved in suspending the completion of the Hume Reservoir until 
the investigation now proceeding is finished may not be less than 
she risk of loss which would occur if the Reservoir should be 
completed and it should be found impossible to recommend any 
ase to which the waters conserved by it could in present circum- 
stances be profitably put. It might, for instance, be found to be 
wise, once the foundations have been installed of a character 
capable of carrying the dam to the full height ultimately contem- 
plated, to finish off the dam temporarily to a lesser height, and 
thus to save considerable sums of money while providing for the 
conservation of a water supply sufficient for all purposes which 
tan at present be foreseen. 
24. A further general observation suggests itself. Ioan moneys 
raised overseas can only come to Australia in the form of goods. 
These goods are subject to the Customs duties provided for under 
the Commonwealth Tariff on importation into Australia, and are 
in this way taxed to an extent estimated at from 15 to 20 per cent. 
of ‘their value. The result is that this proportion of moneys 
borrowed abroad for capital purposes comes to the Commonwealth 
as revenue and is spent accordingly. This diversion of capital 
‘unds to revenue is obviously bad finance. 
25. We conclude then that while of course the Australian 
Governments must continue to borrow for the completion of 
schemes on which they are already embarked (excepting such, if 
there be any, as on a careful review of them do not appear likely 
to yield a fair return when completed on the fresh capital needed 
bo complete them), they should proceed very cautiously in the 
matter of the initiation of new schemes involving the expenditure 
of borrowed money; and should submit them before initiation to 
the most rigorous scrutiny from the point of view of their prospects 
Diversion of 
loan money 
to revenue. 
Suggested 
Jorrowing 
policy