RESTORED CREDIT

Evening Post, Volume CXV, Issue 31, 7 February 1933, Page 10

RESTORED CREDIT

INTERNAL TESTS

AUSTRALIAN BORROWING

"Evening Post," 7th February. New Zealand cannot fail to be interested in Australia's dealings in the problem of "how far shall the banks carry the Government?' Yesterday's Australian cablegrams show that the banks will lend another four millions' for public Works, but the Commonwealth Bank Board ..adds _that, after this, the Australian Governments "must cease to rely on the banks for financial assistance, now that the emergency period has passed." Probably" "the Commonwealth Bank BbaTd: believes that tire last five words are a t fact, but Js anxious to make the politicians help to prove them a fact, by not calling on the ; banks for public works loans, "beyond this'vfbur millions. Prom the'bank point of view, the Governments should.,.acc~ept -the responsibility of dealing' wiffi the and public works problems without further borrowing, from the.banks. If the Governments accept that responsibility, they will provide new evidence that "the emergency period, has passed." . . The (Cpmmonwealth Bank Board's statement" may be read in conjunction with ■ a London cablegram in another part of yesterday's paper, which affirmed "the complete -. rehabilitation of. Australian credit" in London, evidenced.by Commonwealth 3% per cents, touching 101, even while the' money drain of the Kaffir boom" "was cheapening other gilt-edgeds. "Whether rehabilitated credit in London, as represented by prices of Australian stocks;. means any step toward renewed ability borrow in London for Australian public .works, is another question. London lenders, like the Commonwealth Board, may, expect Australian Governments to deal with unemployment and public'works out of 'revenue, not out of loan. ,In which case, Australian politicians must consider the political result. ""'

This. trial °f strength between the Governments' (represented by.'.the Australian Loan Council); and the ' Commonwealth Bank Board has been working up for some little time. As recently as Ist February it was anticipated in political circles that the-Loan Council would ask the-banks'-for^six millions. -But next day, ■when the Loan Council met, it was given outlthat only four millions Would be asked fotrrrspine idea of the banks' attitude havrng'.-eyidently been obtained. It was' naively; announced on 3rd February /that Treasury officers,,.on,looking, again into the .six millions ■- 'estimate, found that '•'credits totalling approximately £1,000,000 had not been ' iakeh into consideration in drawing up the earlier figure (£6,<)0b,p00)."vll£ the Treasury officers discover' 'another million of unconsidered credits; they and the Commonwealth Bank Bbird will be exactly in line—for the-time; being. .;■■..