FEDERAL FINANCE

Hokitika Guardian, 12 November 1930, Page 5

FEDERAL FINANCE

LOAN COUNCIL MEETING

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

(Received this day at 10.30 a.m.) CANBERRA, Nov. 12.

A dramatic feature of the Loan Council meeting was Mr Lang’s agreement to Mr Lyons’s plans to float the con version loan of £28.01)0,000 at six per cent for two years. £5,750,000 for ten years and £5,500,000 for twenty years. Tho decision was unanimous although Mr Lang in an onrly discussion expressed the desire to withdraw from the Council taking with him bis share of the loan approximately .£“4.000,000. His motion that all future loans should lie subject to a State Federal income tax was defeated by six votes to one.

It was explained tho purpose of the two years quotation at six per cent for the doan was to enable advantage to be taken of some American capital now tied up in Australia owing to exchange rates. Mr Lang, in desiring to withdraw from the Council, stressed the point that he received a mandate from the people of New South Wales to pursue an independent course. He contended that now, that it was obvious the Loan Council was no longer able to give New South Wales the money it needed, lie therefore should be given permission to arrange his own loans, Unemployment distress was serious in his State and this justified nil attempt to take tho quickest and most effective means to afford relief. If permission was refused that would not affect the determination of his Government to raise money independently.

This statement was received by members of the Council with considerable feeling. Mr Barnes (Queensland Treasurer) said Ah - Lang’s request should be resisted mainly because while New South Wales might benefit the other States would suffer. M r Lyons declared that the Loan Council in the present circumstances was a national necessity. Its past inability to secure sufficient funds was not due to any fault of the Council, but lack of money.

ATr Hill, opposing Air Lang’s motion for his State’s withdrawal moved an amendment that the committee have no power to agree to this course (tonlstiti/fcionally, and this was carried.

The Council decided that the question /of imposing State taxation on interest 1 from all Commonwealth loans raised after July 1; 1930, be discussed at next meeting. Any action taken is not to apply to the present conversion loan, it stated, owing to the late hour New South Wales bad withdrawn from the Melbourne financial agreement standing committee. LONDON, November 11. Mr Seullin in a statement, said the decision of the Loan Council to proceed with the conversion loan on Mr Lyon’s terms will be well received in London, and react to Australia’s advantage.

“I spoke to Air Lyons to-day,” he said. He was very glad to hear my voice, as 1 was to hear his. He is carrying the responsibility, but is lacing the task manfully.”