AUSTRALIA’S DEBT

Dominion, Volume 20, Issue 47, 19 November 1926, Page 11

AUSTRALIA’S DEBT

LARGE PROPORTION DUB TO WAR j REPLY TO STOCKBROKERS’ PAMPHLET - , AN “UNWORTHY ATTACK”

Referring to the criticisms of Australia's loan methods contained in the pamphlet re- , ccntly issued by two stock. ; brokers, the* chairman, at a meeting of the English, Scot- ■ tish, and Australian Bank pointed out that a large portion of the Australian debt was due to the war, and declared ; that the attack was an unworthy one. i By Telegbafh.—Press association. Copyright. | London, November 17. [ Presiding at a meeting of the English, Scottish, and Australian Bank shareholders, Air. Andrew Williamson, referring to the pamphlet issued by, Messrs. Sydney Russell Cooke and EH. Davenport," stockbrokers, in which: Australia’s loan methods were criticis-, ed pointed out that Australia, through giving the flower of her young manhood to help in the Great War, eventn-] ally incurred expenditure exceeding £600,000,000. Of this £267,000,000 had been repaid out of revenue, and ( £311,000.000 was still outstanding/ Over- £90,000,000 of the Commonwealth’s original war debt arose from the debt to" the Imperial Government for services rendered and goods suy>j plied in, connection with the war. A great proportion bears interest at 5 per cent., and all is being repaid in semi-annual instalments, which are equivalent to a further 1 per cent, on the whole debt. ■ “Compare this with our Allies treatment of us in respect to our advances to them,” said Mr. Williamson. Yet now Australia is being reproached with the figure at which her debt stands, although the war debt accounts ’ for over one-third of it. This attack, and its method of raising doubt as to the security ,behind the debt, in un- , worthy, and if it be the uninspired ex- ; pressibn of opinion of the two joint authors, it is not lacking in audacity.. This unprecedented dictation from a private source through public propa-: ganda seems to go beyond legitimate; criticism, and ought to be strongly, deprecated." ....... Mr Williamson added that in Ans- , tralia', as in Britain, industrial progress and development was hampered and retarded by the heavy burden of tax- i ation. “It cannot be too strongly >m- : pressed upon the Commonwealth and the State Governments,” he said, “that . thev should devote their utmost ener- , gies to effecting economies in public services, restricting increase in indebtedness to expenditure essential to the development of natural resources. Extra vagance and wasteful expenditure will inevitably injure their credit. COMMENTS OF LONDON NEWSPAPERS SOME MISCONCEPTIONS REMOVED (Rec. November 18, 5.5 p.m.) , London, November 17. | The “Dailv Telegraph’s” city edi- ■ tor says: “ft is fortunate that Mr., i Bruce is here to deal first-hand with the criticism of Australian finances, and we congratulate him on removing some misconceptions. There has never been any question that a rapidly-grow- . ing country Eke Australia had to develop in advance of immediate needs, but there was a general impression that some ‘reproductive’ expenditure has not always been prudent. Though i the railways pay working expenses and the maintenance of the lines in good, repair, and meet nearly all interest charges on their cost, they still result ; tn a loss to the States. As an instance New South Wales has a deficit of £1’274,000. Lenders will keenly watch the workings of the Loan Conn-, cil If it controls the borrowings of the various States it will remove doubts. We are assured that future ! prospectuses will contain more information, and if each loan, carries a sinking fund extinguishing it at due date, there will be less room for criticism of. the financial policy of the < States and the Commonwealth. i The “Morning Post” says that hawkers and commercial men present were manifestly impressed by Mr. Bruce s straightforwardness ana directness, i and "the equally forcible observations , on the same subject by Mr. Andrew Williamson, whose past speeches show that he holds no brief for the Aus- . tralian Governments, but was disturb- ; ed by the general attack on Aus- ; tralian finances. Mr. Bruce, having practically undertaken that fuller information shall be given in pros- ( pectuses seems almost to foreshadow New South Wales joining the Loan • Council. Bankers and inspectors t would welcome such a step.