246 THE IMMEDIATE FUTURE IN RELATION 
between the debits and credits in the British international 
account has only to be compared with the total of foreign loans 
to afford conclusive evidence of the shrinkage in Britain's power 
to save.l This comparison is set out below. 
Surplus of Income Account and Foreign Loans for 
Great Britain 
(In £ Millions) 
Total income from all sources 
Less excess of imports . 
Surplus available . . 
Overseas loans . : 
Surplus available at 1913 prices. v 
Overseas loans at 1913 prices . , 
1913. 
1928. 
504 | 508 
390 359 
114 149 
148 105 
181 5 64 | 100 
160 50 | 84 70 
1926. 
It is clear from this analysis that the volume of foreign loan 
issues in 1928 was only 44 per cent. of the pre-war volume, 
although it should be noted that the amount retained for 
domestic investment was greater by about the same proportion. 
After 1924, since there was no available surplus from production, 
Britain was actually borrowing to finance her foreign loans, 
although the rate of borrowing progressively declined thus: 
1924, £81 millions; 1925, £60 millions ; 1926, £55 millions ; 1927, 
£20 millions. Ineffect over the four-year period she thuslent £470 
millions and borrowed £205 millions. Short-period borrowing, 
however, if it did not actually cease was almost negligible by 
1928, since there was in that year a surplus of £30 millions 
applied to domestic investment. But the post-war surplus was 
£100 millions as compared with £180 in 1913; and the volume 
of loans but £70 millions as compared with the pre-war £160 
millions. It would appear, therefore, that Australia cannot rely 
apon the imminent recovery of Britain’s former ability to pro- 
vide capital for investment abroad. Further, the reorganization 
of British industry is making heavy demands upon the capital 
surplus. Over the period 1924-8, inclusive, an annual average, 
reckoned on the pre-war price basis, of £70 millions was thus 
absorbed, compared with the annual average of £30 millions 
for the five-year period immediately prior to the war. Although 
! See Gregory, First Year of the Gold Standard, pp. 15 ef seq.