overdrafts, until the o verdraft has
reached some three or four million
76
dollars, would be cheaper than to finance
the works immediately from long money.
It often happens that short borrowing
is at any particular moment cheaper
than long. This, however, does not
make it sound or prudent to finance
permanent works from short money, so
incurring an indefinite liability which
may turn out particularly expensive
in the end.
4. Apart from this, the particular
method proposed to be adopted looks
somewhat complicated.
The Government
will apparently borrow from the Bank,
paying interest on the balance between
the overdraft and deposit. Later, the
Government will fund the overdraft and
presumably repay part of the funded
loan