The Guardian And Evening Star, with which is incorporated the West Coast Times. THURSDAY, JUNE 18, 1931. THE LOAN CONVERSION.

Hokitika Guardian, 18 June 1931, Page 4

The Guardian And Evening Star, with which is incorporated the West Coast Times. THURSDAY, JUNE 18, 1931. THE LOAN CONVERSION.

The loan conversion scheme as a prime means to save Australia from financial ruin is taking a definite shape. As a Sydney paper remarks “It is significant and very encouraging that three Labour Premiers, including Mr Lang, have gone hand in hand thus far with three non-Labouh Premiers on the road to settlement. Even more significant is the fact that the Prime Minister, with Mr Lang the bitterest opponent. hitherto of drastic reduction in expenditure has come into line with the 20 per cent, reduction. If the problem had been faced in August of last year it would have been easier than it is now. Mr Scullin and Mr Lang decided to put off the evil day. The best hope for recovery is that they are facing it now!” The conversion of the internal holding is very substantial. It has been explained that if carried through as intended, the Commonwealth will save between ten and' eleven millions an unally, while the States will have a saving of between fifteen and sixteen millions. New South Wales alone will save' six millions anuually. But as, the Sydney paper points out there are difficulties in the way as well as differences of opinion. One outstanding difference is in regard to the way the proposed conversion should he brought about. The voluntary method is preferable, if it cmild he relied on. Mr Theodore told the Conference that reliance on the patriotism of bondholders is not sufficient—that some more com celling wav must be found, if the whole project is not to fail. There is no escnne from the fact savs the mp°r, that the scheme must he n]]-em-b’-aeine if i+ is to save Australia from the most difficult nosi+ion in which she has vdt .found herself. 'The Government—everv Australian Government — can comnel the hnodholders to take per cent, less, and thereby reduce the

rate of interest in effect to 4 per cent. It is unplensont to disturb the paper adds, what we have come to look upon as contractual rights. No one would recommend it if there were any other feasible or practical way. The country is in the position of a ship carrying heavy cargo, and shipping heavy seas—and deciding, for the safety of all concerned, that some of the cargo must go overboard. To jLotison part of tipcargo would be repudiation if it were possible to carry the whole in safety. It is not repudiation but virtue if the alternative to jettisoning is the foundering of the ship. A Latin proverb says safety of the State i.s the supreme law And it is with this in mind that the country is facing the situation. The conversion scheme within the Commonwealth appears to he the only way open if a great stroke is to be attempted, ancl it will redound to the credit of all Australia if the position is made the best of. and the wishes of the Premiers’, Conference met wholeheartedly bv tlmse who arc in the position to assist by readily agreeing to convert the bonds held on the lines proposed,