AUSTRALIAN FINANCE.

Hokitika Guardian, 12 April 1928, Page 1

AUSTRALIAN FINANCE.

AN OUTSPOKEN CRITIC. Concerning Australia’s trade position as disclosed by the complete figures for 1927, the “ Wild Cat ” Monthly has the following comment:— “ Publication of the complete trade figures for the second half of 1927 and comparison of them with the returns for the corresponding period of 192(5 have led to optimistic statements that the position has improved. And it has improved in the sense that the patient is not sinking so fast. The six months’ exports failed to pay for imports by 99,219,000, and no provision whatsoever was made to cover the “ obliga-

tions abroad for interest and services,” except by raising further loans abroad. If the whole half-year, is an indication of what the whole year will be, the situation, as regards dealings in merchandise only, is belter than in 1020-21, 1922-2:1, 1929-21, and 1920-27. lint, the year's trade balance, judged bv the six months’ figures, is going to be

to 1 ,000,(101) worse than that of 1919-20. that was the last \o r in which Australia. paid all its cxtcniali obligations out of ifs own resources and bad a surplus. Something similar look place about 1910.

I* ii tVji'tn n:i toly t]ir nocasioiiiil limnirnble t riifl<* Ini hi nci'. which was a very "(Mill liiilillKT (".I'll ns lute lIS 1 :H!». is ill very little importune!' now owing to llin inordinate increase ol external obligations. In the second linlf ol lo2i loans floated n I iroail amounted In £27,<K)o.<l(K>. and if Hie pace is mnintained 1927-28 will Ijo the record year for external lio now inn;. 'I here was great lack of any large and definite public works policy to explain these financial doings, but ns none of the money came hero the adverse trade balance and the ‘obligations abroad furnished a whole volume of explanation in themselves. The * obligations were calculated at 1‘2.‘i,200,000 lor the year after the war. and are estimated at I'd f. 000.000 for the current year. How the situation will be handled when they rise to forty or fifty millions per annum is a matter for conjecture. Doubtless the process of paying the creditor with his own money must end somewhere or lead to something, hut there is a lack of precedent for the situation. I lie elaborate new sinking fund arrangements have no hearing on the case, it being impossible, unless the trade balance is repaired, to get any sinking fund to London or New York in any tangible shape whatsoever.”