AUSTRALIA MUST PAY!

Hokitika Guardian, 3 September 1930, Page 3

AUSTRALIA MUST PAY!

SAYS LONDON BANK REP. PROFESSOR GREGORY COMES TO NEW ZEALAND. (By Telegraph—Press Association). WELLINGTON, Kept. 2. Professor T. E. Gregory, of Sir O. Niemeyer’s Bank of England Mission, arrived this morning from Sydney as the guest of the Government of tlie Dominion. He came straight on from Melbourne via Sydney, without delay, as his time is short. Professor Gregory -lias been accompaning Sir Otto Niemeyer, of tlie Bank of England, in his investigations, into the Australian Federal end State Governments’ financial affairs. When , seen to-day Professor Gregory was not prepared to discuss anything at present, beyond generalities, when he was pressed for his personal opinion on the proposal of a section of Australian Labour politicians that the war debts of the . Commonwealth should be repudiated. .

“Any proposal of a character,” said Professor Gregory, “would bo disastrous, for . Australia. One immediate result would bp. litigation -in the Australian Courts. Such action, if it assumed the. shadow being given effect, to, would be the first time on record that an fiislJass British Dominion bad gone back •on its obligations. No distinction ?an be drawn between the repudiation of external debts and the repudiation of internal debts. All of the creditors must be treated alike, wheYlief they are in England or in Australia. One can’t pick and choose in this way. If the .Australian lioldei of Government stocks were to conitinue to. receive their interest, i., is practically certain- - that the Bj iti.-i bolder of such stocks would seek the aid of the Australian Courts in safeguarding their rights.” But there -wasanother aspect o' repudiation, said Professor,, Gregory to . which its proposers had not giver sufficient thought, or did not inlemto take into consideration, and tha' vas the effect of repudiation on Australia itself. ' The Australian loai lebt was very largely held in Australia itself. The immediate and inivitable consequence of repndiatipr could be disastrous. “I think it would produce a ver severe banking panic,” continue' Professor - Gregory,.. “I he holding' s)f Australian Government obligation: include: Banks, Savings Banks, Lif • Assurance Societies and Friendly So . neties. Property would depreciate ir >alue,' in common with the depreciation in tlie value of securities genef.. tillv.” *’ - - :

Il Australia,” lie said, “can repudiate if it wants to, but, in tlmevent it cannot hope to raise fres oans immediately. If it require fresh loans'- then it had better no: repudiate or talk of repudiation,”

“Australia must not blink facts,’ ;aid Professor Gregory in conclusion “It must square up to facts, .uuT tin sooner it does so, the better it wil 1 beJor overyone.”

He saw a danger in any piecemea’ iction. What had to he done shoub ‘ he done in concert. As lie saw i! Australia was in for a trying and a difficult twelve months. The nitermath would depend upon, the world situation, which no one could control. He did not minimise the uneasiness of the financial mind in Australia and in London, which ivns to be attributed to the suggestions of ; rooudiation' and inflation. The i hip res-' sion made'"outside the Commonwealth by such 'suggestions was not unfortunate -for Australia-. The working neople stood to suffer severely by inflation, because they-- would' be paid in motley the'value of wliieli would be falling. They would be taxed without knowing they-were being taxed. . If Australia hoped again to apt . proach: the London money market for loans it‘must be: very oarelul-ol doing anything that would leave - a jlasliiig unfavourable iinpression •' on tha.tlatfai-ket.

Professor Gregory is staying in Wellington, awaiting the arrival of Sir Ottp Nieineyer. He will visit Mew York before returning to Lon-, don, and he is intending to pursue =ome economic studies in the United States. A NEW ECONOMIC SYSTEM. . SYDNEY, Sept. 2. Mr Makin,-the Speaker of the .Commonwealth House of Representatives, speaking at Broken Hill, declared that Australia could not seek to evade her responsibilities by repudiation of her debts. That would he an infamous policy, worthy, of only the strongest condemnation. The financial crisis was not wholly responsible for the present depression, which wals partly due to the fact that their public men and their leaders of industry and of commerce had been slow to recognise the change from the old industrial system to the new one, unci they had been caught unprepared for this transition period.

N.S.W. MINISTER’S VIEW. SYDNEY, Sept. 2. ; Appealing to the Constitutional .'Association, Him. Mr . Farrar (New South Wales State Minister of Labour) reviewed the steps being taken to deal with the existing depression. He said that the people were realis-