CONTINUOUS BORROWING 239
productivity of the overseas debt. The increase in the percentage
 of the disposable income necessary to pay the annual
overseas interest charge is the most serious aspect of the situation.
 While the analysis does not indicate that the proportion
of the disposable income which is used to hire capital is unduly
 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 prewar
 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 commodities.


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 postwar
 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