AUSTRALIAN MOVE

Hokitika Guardian, 27 February 1930, Page 1

AUSTRALIAN MOVE

TO BALANCE TRADE

[United Press Association —By Electric Telegraph—Copyright.]

LONDON, February 26. Under the heading “Finance Crisis in Australia’ the “Daily Telegraph.” prominently displays on its main news page a story from a special correspondent beginning: —“Australia is laced with a financial crisis, threatening to have a crippling effect on her internal and export trade for some time. The position is so serious and the balances held by the Australian banning houses in London are so depleted that it is necessary to place almost a complete ban on granting letters ol credit on London to customers in Australia.”

The article proceeds:—“lt is almost a revolutionary departure from hanking practice that the bank’s clients should he called to undergo a form of inquisition before being granted the ■ordinary business facility.”

The correspondent gathers that the hanks intend to withhold letters of credit when the purpose may he considered a luxury. The city of London is hazy as to how this ban has arisen, and as to whether it is the result of Government pressure, or of the hanks’ own agreement among themselves, in order to prevent the depletion of their reduced balances. One prominent shipper is of the opinion it will he the most serious blow possible to Australia’s credit here, adding that if persisted in. it would mean an end of credit , altliogether. While it was too early to measure the effect on trade and travel, there was little doubt it would lead to a considerable restriction in both, which apparently, was the avowed aim. The manager of one of the Australian banks in London, said that Australia was out to put her house in order. There had been over buying, and it was necessary now to reduce imports.