FEDERAL FINANCE

Hokitika Guardian, 2 March 1931, Page 6

FEDERAL FINANCE

M. HOUSTON & COY

A RECOVERY EVIDENT. [United Press Association. —By Electric Telegraph.—Copyright.] LONDON, February 28. The “Financial News” says:— “Authorities who are in close connection with trading channels to Australia continue to report improving business in wool, wheat and dairy produce, the prices of which show a distinct tendency to rise.” rothermere for debt CANCELLATION. LONDON, February 28. Little encouragement is given from official quarters to Lord Bother more’s advocacy of the cancellation of Australia’s war debts. Indeed, there is considerable disposition to regard it as a disservice to Australia, whose misfortune is being made the occasion for newspaper exploitation. Downing Street circles emphasise that even the Commonwealth has never suggested the concellation of its war debts. An attempt in that direction, it is pointed out, involves similar treatment for other Dominions, and would perhaps reopen the whole fabric of the reparations agreement. LONDON’S ATTITUDE. LONDON, February 28. There is a relative lull in the London discussion of Australia’s financial maze. Well-informed circles confess that it is. due to bewilderment in trying to follow political convulsions, and states they have more or less resigned themselves to waiting for Cabinet to disclose its hand in Parliament next week.

On the same ground the proposals for tlie fiduciary note issue is passed over almost without comment. Tt is generally agreed that the fiduciary issue proposal has sounded the death knell, of any early alleviation of the exchange position. It is beyond doubt that the outside exchange market has virtually dried up. An interesting theory is that this is due to speculators, they being in fear of being caught by sudden developments. Those arriving in Britain with Australian pounds are finding them worth only 12/6. Then only the Tourist Agencies are buying them. The decision of South Africa to ban Australian silver currency is probably due to tourists seeking that loophole to avoid exchange. Many Australians are arriving in London, bringing accumulations of British silver coinage. One woman this week landed with fifty-seven pounds worth. In a leading article, “The Times” refers to “the folly and dishonesty ol Mr Langs proposals,” but says: “Happily the credit of New South Wales and of the other Governments of Australia, is protected by the joint credit, of the whole Commonwealth. Lord Stanley, in his capacity ns President of the British-Australian Society, has sent a letter to the Press, expressing surprise as a representative of the people at the Australian propaganda. He declares: To injure Australian credit would be insane. It is unwise for representative Australians to stir up hostility in England, for on the support of England largely depends the restoration of Australian creditThe news and comment relating to Australia are sympathetic towards her difficulties, and are inspired by a desire to assist her in her difficulties. The “Financial News ’ points out that to increase the “fiduciary issue,” without regard to a sound economic policy dan only intensify Australia’s troubles. The root of the disorder will remain, just because essential refoims are being imperfectly carried out, and while it remains one dose of currency inflation will merely excite a craving for another.

STANDARD OF LIVING. ENGLISH PAPER’S TAUNT. LONDON, February 28. “Mr Theodore is much a wilier person than. Mr Lang,” says the ‘Manchester Guardian,” in a leading article. “While denouncing Mr Lang’s debt repudiation, he has produced finesounding schemes, the adoption o'J which would ruin creditors’ security. If the currency issue plan is carried out, we expect to see tHe exchange rate on Australian pounds nearer two hundred than one hundred in a few months, for the Federal Government will be in the sharpest conflict wit“ the Australian and the British Banks and three States. Somebody must show the Australians that the march to prosperity must be a disciplined one. One admits that they have the right to reverence their standard of living, but there are times when such divinities have to be propitiated from afar.”

BANK NOTE ISSUES PREFERRED. : LONd6n, February'2B. “Well-informed circles in the city of London regard the new Comnionwelatli currency proposal as a political gesture, ” ‘ says the “Financial Times.” “They are convinced that this policy would not be countenanced either by the banks or by the Senate.” The editorial says the “Financial Times” rather inclined to regard Mr Theodire’s proposals as the last throw in a political gamble. It says the step cannot be compared with the facilities given to some central banks to increase their note issue temporarily beyond tho sums justified by their gold reserves. SYDNEY, February 28. “Two courses are open to Austra-

lia,” said Mr Lang. One is to adopt the New South Wales Labour plan, informing our creditors of our inability to pay, and making an honourable settlement with them. The other is to drift along shouting, ‘Wo can and wifi pay our debts,’ knowing that we cannot until the inevitable ‘black Thursday’ arrives, when not only principal and interest will have to be repudiated, but when finance for ordinary Govern ment services will not be available. Financiers are not favourably impressed with Mr Theodore's latest proposals for. “raising the wind.” His so-called fiduciary note issue was denounced as equally impracticable as bis earlier scheme.

It is authoritatively stated iu State Labour circles that those New South Wales members of the Federal Labour Party who declined to range themselves behind Mr Lang's financial plan and take part in the East Sydney byelection campaign, will not receive the endorsement of the State Executive in the event of an. early election, which it is believed will come before June.