but we are of opinion that she has not in past years always borrowed 
wisely, and that she has pledged to too great an extent those 
future resources, and mortgaged too deeply that future prosperity 
upon which she can reasonably reckon, thus throwing the burden 
of her borrowings upon future generations who will have their own 
needs to meet. 
81. We venture to quote an opinion expressed by two eminent 
citizens in a recent report to the Government of South Australia :— 
‘“ We have the greatest possible confidence in the resources. 
of Australia. As soon as statesmen and people realize that, 
while we owe money abroad and require to sell our products 
abroad, our standard of Government and private expenditure 
must be in relation to our position in the world’s affairs, then 
will our real prosperity be established. No Act of Parliament 
can alter this basic truth. That a new country is justified in 
borrowing money for reproductive works has always been 
recognized, but results must be achieved and production must 
advance in proportion to the public debt incurred.” 
32. A less ambitious borrowing policy such as we have outlined 
above can be contemplated with confidence. In the first place we 
cordially welcome the unanimous acceptance by the States of the 
Financial Agreement under which the Loan Council is established 
and the overwhelming majority obtained at the recent referendum 
for the necessary amendment of the Constitution to enable the 
Commonwealth Government to validate the Agreement. It now 
remains only for the Commonwealth Parliament to authorize the 
conclusion of the Agreement, and our knowledge of the London 
money market enables us to say with confidence that the sooner 
that final step is taken the better it will be for Australian credit. 
The conclusion of the Agreement will mark the definite end of a 
condition of affairs when seven different Australian Governments, 
sach acting independently of the other, entered the loan market 
with no regard for, and indeed, to the prejudice of, each other’s 
mterests. Collective borrowing by the Commonwealth on its own 
and on the States’ behalf will mean cheaper borrowing than would 
otherwise have been possible. The provision of a regular sinking 
fund both for existing and for future loans will be heartily welcomed 
in London; and if the objects of the loans are such as we have 
attempted generally to indicate above we have no doubt of their 
favourable reception. It is true that the Loan Council will not 
5e empowered to deal with the merits of the loan programme of the 
Commonwealth and of the individual States, but only with the 
total amount that can be borrowed in any year. Nevertheless we 
teel certain that the discussions which will take place in the Council 
will conduce to prudence in the objects of public borrowings as well 
as to moderation in their amounts, and that mutual consultation in 
this, as in many other spheres, can be productive only of good. 
[he 
Financial 
Agreement 
wind the Loa 
Council.