charge rose by a little over 50 per cent. (from £20,807,026 to £31,373,271). The inference, which is confirmed by such obser- vations as we have been able to make, is that this position results from heavy expenditure of loan capital by the States on develop- mental undertakings which have not proved to be self-supporting and have imposed a heavy burden on the general community and consequently on the cost of living and production. 16. It is at present a matter of great difficulty to ascertain the exact financial position of each object or undertaking on which loan moneys have been expended in Australia, though we are very glad to note that the Commonwealth Budget papers are now being prepared in a form which goes far to remove the difficulty so far as the Commonwealth is concerned. The same is now true in conspicuous degree of New South Wales, and of South Australia as regards its States Railways, concerning which an admirably clear statement by the Railway Commissioner shows, for the year ended 30th June, 1928, a deficit on revenue account of just under £1,000,000 and an accumulated deficit of just over £8,000,000. We would respectfully suggest that the other States would do well to follow these examples, so that the public may be better able to understand clearly how its funds are being spent and with what result in each direction. 17. Certain other examples of heavy loan expenditure seem to us to be worth citing. 18. Capital expenditure on the Murrumbidgee Irrigation Scheme in New South Wales to the amount of over £9,000,000 had been incurred to the 30th June, 1927; on group settlement in Western Australia to the amount of nearly £5,600,000 to the 30th June, 1928; and on the Murray River Scheme, including the Hume Reservoir, to the amount of over £6,000,000 to 30th June, 1928, while it is estimated that a further £4,000,000 will be required to complete the Hume Reservoir. These figures of capital expendi- ture are exclusive in all cases of the amounts advanced to persons served by the schemes referred to. On Closer Settlement in all States over £12,200,000 had been advanced as at the 30th June, 1927, of which nearly £8.600,000 was then outstanding. On Soldier Settlement, of which, however, it is fair to remember that a main motive was the discharge of a debt of honour to the returned soldiers, over #£45,500,000 had been advanced, of which Just over £36,000,000 was then outstanding. 19. We are not in a position to estimate the extent to which these advances and these capital expenditures, with the interest thereon, may be ultimately recoverable. But when, for instance, We are told that out of a total expenditure, including advances to Settlers, of nearly £8,000.000 on group settlement in Western Form of public accounts. Examples of heavy loan axpenditure.