EXCHANGE CRISIS

Hokitika Guardian, 17 January 1931, Page 5

EXCHANGE CRISIS

MR SCULLIN. PRESS VIEWS. [United Press Association. —By Electric Telegraph.—Copyright. J SYDNEY, .January IG. The Prime Minister, Mr J. 11. Scullin’s .speech at Ashfield last night. has left the Australian public wondering where he really stands on the subject of inflation. The “Evening News,” in an editorial to-day, says: “ A stark 'lact remains that Mr Scull in has broken the Melbourne agreement and consented to inflation. He wrapped it up in words in the hope his audience would not notice it.” SYDNEY. January 10. The “Sun,” in an editorial, says: Mr Sou Hi n has declared himself lor neither inflation nor deflation, but 'lor the rational use of credit , and currency to get the wheels of industry running again. The “Sun” adds: “That is the note which is needed to restore confidence in Australia both at Home and abroad. This certainly is a splendid gesture." The Sydney “Morning Herald’s” heading set ■up to Mr Scullin’s speech reads: “Against inflation! Mr Scul--1 in’s emphatic declaration!”

“TIMES’* COMMENDS SCULLIN LONDON; January 10. “The Times” commends Mr Scullin’s Ashfield speech, and also reviews the position as regards the Loan Council.

“The Times,” says: The Labour Government of the Commonwealth, if sufficiently determined, can bring pressure on the Labour Government of New South Wales to fail into line and play the game. The danger of a crisis is a weakening of confidence. Once confidence is restored, there will be no lack of readiness to help in overcoming temporary difficulties. Mr Sculilin only requires to show a firm front to both of his difficulties and to the extremists in order to put Australia on the high road to recovery;.”

BANKERS’ DEBATE

MELBOURNE, January 11

Discussion on the. London Exchange transactions began to-dav at a confer-, ence of the Associated Banks, which was convened by the Commonwealth Bank with a 'view of restoring stability. A long debate, is expected. b< tween the advocates of free exchange and those favouring “pegging” for . a stabilised exchange.

BANKS’ SPOKESMAN

MELBOURNE, January 16

Mr C. H. Tranter, Chairman of the Associated Banks, discussing Mr Seullin’s Ashfield speech, said.: It was all very well talking about, the refuse of the banks' credits. The banks were already doing as much as possible. They could only sell credit if the}, could, but it was the notion prevalent in some quarters that the banks had ■unlimited credit in their vaults. That was entirely fallacious. Indeed the banks had reached the end of their resources. The Government, not the banks, could relieve the position. However, there was no need for panic.

The efforts of some people, said Mr Tranter, to send money out of this country were most undesirable. He instanced the case of one. man who had paid twenty-six .pounds sterling for one hundred pounds sterling in London.

MONEY MARKET. EFFECT ON SCULLIN’S SPEECH. SYDNEY* January lb. The Prime Minister, Mr Scullin’.? speech on Federal financial policy lias imparted a more confident tone’to the investment market to-day. This is reflected particularly in the loan and banking sections, which had suffered reverses on account of inflation talk. Prices were higher in both groups and £IOO bonds at o£ 1933 advanced by 18s 9; 5} per cent. 1931 bonds by 11s 3d; six per cent. 1933 bonds »y 16s 3d; six per cent 1937 by 17s 0d; and six per cent 1938 bv 7s 6d. Bank of New South Wales shares rose os to £27. New Ztalnud insurance shares wore 2s up, and Colonial Sugar shares were 2s 6d up. LONDON’S VERDICT NOW. LONDON, January 10 “Worth Keeping,” is the simple oneline heading on the front page of the “Daily Express” under which there appears the following: “interviewed to-night, the ‘Daily Express’ • City Edditr said: ‘Don’t sell Australian bonds now.’ ”

VICTOR-1 AN SATIS FACTION*. MELBOURNE, January 16. Mr Scullin’s speech had a stimulating; effect on the Stock Exchange. The prices of seven Commonwealth issues showed recoveries from 2s Gd to 1 7,s (Id per cent, to-day. The turnover .readied by the high level £33,000 ibis nnorning. The Prime Minister’s! speech has treated a favourable impression in Victoria. Tt was regarded as a little vague on inflation, but the feeling generally is that it affords a ray of hope.

STATIC WHEAT PURCHASE

BRISBANE, January in

The Queensland Government had decided to acquire all the flour in that State, the object being to save the wheat growers from rain. Altliougli this actio nis likely to cause flour and bread to rise in price, the Premier, Mr Moore, declares it is justified in the circumstances.

MR BAVIN'S VIEWS. (Received this day at 9.40 a.m.) SYDNEY, January 10. .Mr Bavin, loader of the State Opposition . points ouL-Mr Srullinhs suggestion for a little temporary inflation pending a loan, would defeat his own object. The very fact of adopting inflation would desTToy the chance of raising a loan. It is equally difficult to co-operate with the Government in facing the linancial crisis until the Government stated exactly where they stood on the subject of inflation.

MR SCULLIN EXPLAINS, AG A INST TNFL A TION. (Received this day at 10 30 a.m.) SYDNEY, January 17. Mr Scullin, in explaining bis Ashfield remarks, declared himself’ definitely and emphatically against inflation in any form. He says he lias no intention of printing notes to a face value of twenty milion sterling to pay for public works, even as temporary expedient. There appears to be a misapprehension in some quarters” said the Prime Minister, “and I wish to remove it. The issuing of notes for public works would bo disastrous.”

Speeches in Parkas electorate show Mr Theodore has swung in behind Mr Scullin. He made no criticism of Air S-uilin’s Ashfield declaration, in fact he tco declared himself against inflation.

On the other hand, .Mr Gibbons M.F. in an address at L lulercliffe. advocated the immediate release of credits. Australia cannot continue lor another thiee months unless deflation is ariested. lie said :—“Credits must be supplied to asist the mail on the land who is in a serious plight. Credits alone will save him. Wheat growers at present owe the associated shopkeepers of the State twelve million sterling. We could safely issue another fifteen million sterling and keep within the twenty-five per cent standard.”