STILL SOUND

Ashburton Guardian, Volume 57, Issue 244, 27 July 1937, Page 3

STILL SOUND

DOMINION’S CREDIT IN LONDON. e - ” AUSTRALIAN MINISTER’S VIEWS. d l- ' it (Per Press Association.) a AUCKLAND, July 26. ii The state of Australian and New n Zealand credit in London, together with matters of policy in central banking matters, were the subject of com- [. ment by the Hon. R. G. Casey, Treasr urer of Australia, who is passing d through Auckland by the Monowai on his way home from the Imperial Cone ference, which he attended as a raemr her of the Australian delegation. Air d Casey said he was in London when a . sadden crisis developed regarding the 0 sale of gold. Just previously the first J announcement of the proposed profits tax as a national defence contribution s had exercised a most disquieting effect _ in the city, and the general financial . outlook became very depressed. Then t the movements in gold caused increas- . ing alarm with a result that all gilt- ! edged stocks fell in value, while there j was a disastrous slump in metals. However, the market for primary suffered no great setback. “It was naturally a matter of interest to study the reaction of the mar- ) kets,” Air Casey said, “but unfortu- , nately these difficulties occurred just at i tho time when the Australian loan con--3 version operations were in progress in [ London. The result was that about TO , per cent, was left on the bands of the • underwriters, but in the circumstances ; that was not surprising. In comparison with other countries, Australia’s [ credit in London is still sound, and I. ; think the same can be said for New . Zealand.” Central Banking. Discussing matters of the internal financial policy in Australia, Air Casey said he had just received the report of the Royal Commision on Banking and Alonetary Affairs, and had only had 1 time to peruse it hurriedly. “It is a thorough and painstaking report which will be of interest to New Zealand as well as to Australia,” Air Casey continued. “The Commonwealth Bank comes in for some mild degree of criticism arising out of the exercise of its functions as a central bank in the years of depression. As one who had been in close touch with the Bank for , a good many years, my impression is that the criticism, which is direct but not harsh, represents wisdom after the event. As Napoleon said, we would all lie first-class generals if we could forecast the result of a battle. The Com- j monwealth Bank started its central bank functions during the depression | at a time of great anxiety and unprecedented conditions. The Board had to gain its experience on the run, as ordinary banking experience was of no avail. Central banking practice has frequently to take a line which is contrary to the instincts and interests ol ordinary commercial banking. A more J clear-cut policy of greater boldness in I certain directions on the part of tho [ Commonwealth Bank is easy enough to I advise in retrospect when one knows I 'what has actually taken place. It is a I very different thing to be bold when | none could see through the mist of tho J future, and when such boldness might | easily have meant disaster.” | Encouraging Outlook. f Regarding the future foi ■ both Australia and New Zealand, Air 1 Casey said the most hopeful sign was tho apparent willingness of the United States to take a more liberal view of world trade. The American Government had expressed its desire to bring about a greater measure of reciprocity in trade with both the United Kingdom and the countries of the Empire, and tho prospects in this direction were more encouraging than they had been for many years.