RIGID ECONOMY

Hokitika Guardian, 19 August 1930, Page 7

RIGID ECONOMY

DICTATED BY LONDON BANKERS

(Australian Press Association)

SYDNEY, August 17.

Although Sir Otto Niemeyer, the Bank of England financial' expert, so far lias not publicly ' announced liis prescription for the easing of\Australia’s financial difficulties, there is ample evidence that the specific object of his private conferences with the Prime Minister, Hon Mr J. H. Scullin, as Acting-Federal Treasurer, and with the Australian Loan Council, was in the natme ol : a solemn injunction to put their house in order.' .. The Treasurers of all of the States have since set about the task of trying to balance the budgets, which has meant severe retrenchment, and economies, with threats of more to follow.

The Government in every State are naturally greatly perturbed, while -both business and private, life has never been so agitated as it is now. The average man about town will .be glad to see the last of Sir Otto- Niemeyer, whom they playfully dub ‘‘Our Bailiff.''

Sir Otto Niemeyer, however, has not | yet finished Ills unhappy task, for in the coming week ho will renew liis acquaintance with the Australian Loan Council in Melbourne, and on the decision of the conference it will depend whether Australia will continue- in the position of being liable to be put in default any day. The Financial Editor of the “Sydney Morning Herald” points out that if the Governments tails steps, to reduce the cost of production and abstain from entering the overseas capital market, except for funding or renewal loans and if they raise money locally only for works which will become reproductive within twelve months, then the overseas creditors, if they deem these steps adequate, will give facilities to extend the period of the present floating debts in order that their funding may take place'. ''-The alternative is the danger of a default and of the exclusion of AustVala' from borrowing oil the ; ’ London ' ,market. There are.qt present overdrafts . totalling twenty-eight millions' -sterling with the London banks payable' on demand, and five millions of Australian Treasury bills fall , due on August 31st.