damaged Australian credit, but in our judgment the mere mag- 
nitude of the debt is not in itself evidence of an unwise borrowing 
policy. 
11. In a new country, still largely undeveloped, where the 
recognized scope of the activities of Governments is as wide as it 
ls in Australia, it may be quite proper that large sums of capital 
for development should be raised by means of public loans; but 
It is essential that the development schemes, financed by means 
of them, should be self-supporting within a reasonable measure of 
time, which we recognize may be longer in the case of a Govern- 
ment than in the case of a private undertaking. By this we mean 
that within such measure of time they should, either directly, 
or indirectly through the increased taxable capacity of the com- 
munity and the enhanced value and price of Government-owned 
land attributable to them, provide at least their own working 
costs, interest on the loan capital invested in them, and a sinking 
fund sufficient to provide for its repayment when it falls due. To 
the extent to which they fail to do so they involve the State 
im loss, and to the extent of that loss inflation takes place, the 
dead weight burden of debt on the State is increased and the rest 
of the community are, in effect, paying to the persons served 
by them a subsidy which will be reflected in a general increase 
in the costs of living and production. We are led to the conclusion 
that the Australian community is suffering heavily from troubles 
of this kind. 
12. According to figures with which the Treasurer of the 
Commonwealth has been good enough to furnish us, the respective 
positions of the Commonwealth and of the States as regards their 
indebtedness at the 30th June, 1922, and at the 30th June, 1998, 
were as shown in the following tables *—— 
In Australia| 
Overseas 
Total 
Per head of 
Population. 
30th June, 1922— 
Commonwealth Debt... 
States’ Debt ... ... 
Total ... ves 
x 
250,000,000 
299.000.000 
£L 
115,000,000 
297.000.000 
£ 
365,000,000* 
519.000.0000 
£ 
66 
93 
172.000.000 
£12 000 000 
R84 000.000 
159 
30th June, 1928— 
Commonwealth Debt... 
States’ Debt ,., .. 
Total ... van 
219,000,000 
339'000.000 
53,000,000 
391 000.000 
372,000,000* 
793.000.000 
59 
{15 
551.000.000 | 544.000.000 
295.000.0000 
174 
Objects of 
Australian 
borrowing. 
Comparison 
>f the 
position 
of the 
Common- 
wealthand of 
ihe States as 
regards 
public debt. 
Exclusive of loans raised for the States. 
13. Of the total Commonwealth debt at the 30th June, 1928, 
£293,000,000 was deadweight War Debt and £79,000,000 was for 
works such as Post Office works, Commonwealth Railways and 
+499 AA