BANKERS’ LETTER

Hokitika Guardian, 27 February 1931, Page 5

BANKERS’ LETTER

COVERING FINANCIAL POSITION, Australian Press Association.) (Received this day at S n.m.) MELBOURNE, February 26. Following a private coimreuce of bankers, their letter embodying their conclusions on the Theodore financial plan and the three-year proposed plan for re-hnbilitation of the national finance, was made available for publication to-night. The bankers begin by endorsing the suggestions; for the absorption of unemployed by reproductive work', maintenance of national solvency, restitution of the budget equilibrium, an equitable, spread of losses of national income over all sections of the community, and then express regret that they canot agree with all the methods suggested by the Federal Treasurer. .Some of these they say, are not based on sound economic lines, and should rather accentuate the present difficulties. The banks, however, are prepared to co-operate in any reasonable practicable scheme likely to afford relief in the present crisis. The first essential was the putting Of the fitiarice of the government iii tinier, lit accordance With the conditions laid down by experts in. the three-year plan. If this is done, there is little doubt tiic banks generally could make some reduction of the present rates of interest. They pointed out that the overseas debt of various. State Governments must ultimately be funded, but this could not be done until a definite effort was made towards budget stability. The proposed special tax on govei nment securities must eventually lead to a difficulty in converting maturing loans or raising new loans. Finally, the hankers said the interest on Government overseas obligations ; would continue to be provided through the exchange pool as long as it was in the power of the banks to do so.