ONE REMEDY

Nelson Evening Mail, Volume LXIV, 16 January 1931, Page 5

ONE REMEDY

AUSTRALIA’S FINANCIAL ILLS

RESTORATION AND STABILL SATION

SPEECH BY MR BCULLIN

(United Press Association—By Electrio Telegraph—Copyright)

SYDNEY, 15th January. Mr Scullin’s one remedy is neither deflation nor inflation. “The remedy in my judgment is restoration and stabilisation.” With these magic words the Prime Minister, Mr Scullin, replied to a section of the Labourites, chiefly New- South Wales, clamouring for inflation of the currency. He delivered an hour’s speech to-night at Ashfield town hall, opening the Labour campaign in the Parkes by-election. Thousands were unable to gain admission. Air Scullin, who was received with a tremedous ovation, emphasised the very serious plight of the Commonwealth and explained that the financial and economic position had gone from bad to worse, and it would not be possible to balance the budget in the current financial year. He then proceeded to examine the suggestions for meeting the position. “Some people say we should bring down prices and wages. Others say we should go in for inflation. My answer Lo that is, the remedy is neither deflation nor inflation. The remedy in my judgment is restoration and stabilisation. (Prolonged cheers). While I was abroad I discussed the depression with some of the biggest brains in many countries and I found that the more they knew about the subject the less they knew about the remedy. There is no easy road. If there was one could be sure the older nations would not be where they were to-day. I do not want to create in the minds of the workers that the easy road is by printing a mass of paper. There is a very real danger of printing notes because it leads to wild inflation of currency, wages are depressed, rents rise, and there are often expansions of credit and sometimes these are not controlled by banks in strict accordance with the economic conditions. The only people likely to benefit are bondholders.” Continuing, Mr Scullin said that what was really needed in Australia was an infusion of new_ capital. One suggestion was to print notes, but that would only be advisable until arrangements could be made for flotation of a lo ßank advances might be made where possible in order to create a stimulus to production and marketing and giving employment. Mr Scullin said he would immediately go into this aspect with his colleagues. The whole country and the newspapers must work to some definite plan in order to create a greater feeling of security. He was seeking the best advice aiming ulways at the restoration of confidence. He asured the people that his Government would do nothing to ruin Australia because that would mean the ruination ot the working classes, whom he had represented for many of the best years ot his life. NOT PRACTICABLE PROPOSED EXPERTS’ CONFERENCE MELBOURNE, 15th January. It is revealed that the proposal to ask the Leaders of the Opposition larties to assist in the efforts to re-estab-lish Australian finances was rejected by Mr Scullin at yesterday’s Loan Council meeting. He expressed the opinion that it was impracticable. MELBOURNE, 15th January. Mr Barnes, Queensland Treasurer, is pessimistic about the outcome of the proposed conference of experts which has been directed to formulate a three year plan for the rehabilitation of the national finances. He cannot see how they can make an incoming Government accept the plans of its predecessors. Moreover all sorts of political exigencies are likely to militate agains the success of any plan.

AUSTRALIAN STOCKS LONDON, 14th January. The “Times” city editor says that the latest news indicating the strength of Sir Scullin's position and Sir Lan g s weakening, has slightly heartened the market for Australian stocks. With a cessation of the recent panic selling the bargain hunters action has slinened quotations. There has been some selling of New Zealand stocks influenced by the increased discount on the New Zealand pound. DECISIVE STAGE REACHED LONDON, 15th January. The 1 “Financial News” says: “Political affairs in Australia have now reached a decisive stage. Investors will scrutinise Mr Scullin’s speech to-mglit with the utmost care.”

A BETTER FEELING IN LONDON FINANCIAL CIRCLES (Received 16th January. 12.15 p.m.) LONDON, 15th January. Financial circles regard the latest news from Australia as satisfactory, and are especially pleased with Mr Scullm s three-year plan. The feeling w_as immediately reflected on the Stock Exchange where practically all Australian stocks recovered several points from the depressed level early in the week; but New Zealand’s sagged somewhat owing to the increased exchange rates.