A CLASH FEARED.

Press, Volume LXVIII, Issue 20496, 15 March 1932, Page 9

A CLASH FEARED.

NEW GUARD AND LANG FORCES. FEDERAL PRECAUTIONS. (UNITED TRESS ASSOCIATION—BY KLZCTiIC WLEOEAPH—COPiBIOHT.) (Received March 14th, 9.30 p.m.) SYDNEY, March 14. A message from tho Canberra correspondent of the "World" says tho Commonwealth Government is taking adequate precautions to deal with any disorder in New South Wales between the Lang forces and the New Guard after the proclamation of tho Financial Agreement Enforcement Bill, A secret investigation has just finished and deep concern is felt by tho Federal Government as to the possibility of a clash occurring between the rival organisations in Sydney, The Commonwealth Government proposes to swear in special peace officers at a moment's notice should trouble arise. THE NEW GUARD'S LEADER. STATE TO LODGE APPEAL. SYDNEY, March 14. It is officially announced that the State Government will lodge an appeal against the decision of Mr Justice Street, who allowed the appeal of Colonel Eric Campbell (leader of the New Guard), against the decision of tlid Magistrate imposing a fine for referring to Mr J. T. Lang in insulting terms. STATE CHEQUES CASHED. LANG GOVERNMENT'S ACTION. FORESTALLING COMMONWEALTH LEGISLATION. SYDNEY, March 14. The "Daily Telegraph" says it is suggested that the State Government withdrew £1,150,000 from the banks to forestall the Bill passed by the Senate last Friday. If this is the case the object of the move no doubt is to embarrass the Federal Government by attempting to put the money beyond its reach. If anything of the kind has happened, the taxpayers in the long run, of course, will have to pay the cost of the fight between the Commonwealth and State Governments. The newspaper adds: A trifle of £1,150,000 will not go far in running New South Wales. It costs the State Government about £50,000,000 a year to carry on, including £8,000,000 for interest payments. Comment toy Prime Minister. The money withdrawn has been deposited in tho New South Wales Treasury, and tho ordinary Treasury police guard has been strengthened. The Prime Minister (Mr J. A. Lyons), commenting on the action, said it would not in any way prevent the carrying out of the Federal law to compel the State to meet its obligations. Mr Lang is deluding himself if he thinks his action will be tho means of evading the effective weapon that has been forged by tho Commonwealth Government to compel him to meet his undertakings. Mr Lyons added that it would seem that Mr Lang had sufficient money in banks after all with which he could have paid tho interest had ho desired to do so. • Speaking at Woollongong Mr Lyons declared that tho Government's efforts to restore industry and consequently remove unemployment had been hampered by the Lang Ministry, and the only absolute remedy he saw was an early Now South Wales election. The Prime Minister said tho Government would have to consider the use of the credit of tho country to enable it to carry out reproductive works and provide for tho unemployed. It would be wrong to go back to the old policy of borrowing money to relieve unemployment and rehabilitate Australia.

SECRECY ABOUT PLANS GOVERNMENT'S BANKING FACILITIES. (Received March 14th, 8.25.p.m.) SYDNEY, March 14. Treasury officials aro' preserving tho utmost secrecy with regard to the withdrawal of £1,150,000, which is more than sufficient to meet a month's salaries and wages of State servants. It is presumed that the money represents income tax, railway and tramway revenue, and lottery receipts. Tho Lang Government has not disclosed its plans for carrying on without the usual banking facilities and persons handling its cheques are likeiy to experience inconvenience. COLLECTING STATE REVENUE. FEDERAL BILL BECOMES LAW. CANBERRA, March 14. The Financial Agreement Enforcement Bill and the Financial Agreement (Commonwealth Liability) Bill have received the assent of his Excellency the Governor-General (Sir Isaac Isaacs). Both measures therefore are now in operation. The main feature of the Financial Agreement Enforcement Bill is a provision that the Commonwealth may attach certain of the revenues of a defaulting State, and use' them to liquidate the debts of that State. It is further provided that the taxpayers in the State singled out by proclamation for the operation of the Act shall pay their taxation to the Commonwealth, and that payments .to the State of. such money shall be invalid. Drastic penalties are provided for persons who attempt to evade the law. Members of State Ministries *re specifically mentioned in the penalty clauses, under which a fine of £IOO, in default imprisonment for six months, may be imposed summarily, and a fine of £SOO, in default imprisonment for two years, may be imposed upon indictment. In introducing the Bill on February 19 th the Prime Minister, Mr J. A.

Lyons, after explaining the extent of the Lang Government's failure to pay interest due to oversea bondholders, amounting to £1,169,735, up-to .February 4th, said the measure involved novel and difficult legal and constitutional questions, but it .was essential that by this means or some other it should be put beyond any possibility of doubt that every Government in Australia must live up to its obligations. ENGLISH OPINION. STATE DIFFICULT TO COERCE. LONDON, March 14. The "Manchester Guardian" in a leader says: Nobody quite knows how long Mr Lang will be able to hold out against the Commonwealth, for the State is a difficult thing to coerce. Mr Lyons (Prime Minister) cannot afford to allow the New South Wales finances to be completely shipwrecked in the process of bringing Mr Lang to heel or the whole object of his policy would be defeated. The controversy has an amusing side, but none the less it is serious, for the soundness of Australian finance and perhaps the whole future of the Dominion are at stake.

TESTING THE BILL. MR LANG - APPEALS FOR POSTPONEMENT. (Received March 14th, 11.50 p.m.) SYDNEY, March 14. The Premier, Mr J. Lang, sent a telegram to the Prime Minister (Mr J. A. Lyons) to-night asking him to defer the proclamation making operative the Financial Agreement Enforcement Bill until he (Mr Lang) had an opportunity of testing its constitutionality. , _ This Bill empowers the Commonwealth to recover money from a defaulting State.