AUSTRALIA’S DEBT

New Zealand Times, Volume LIII, Issue 12608, 19 November 1926, Page 3

AUSTRALIA’S DEBT

ONE-THIRD INCURRED IN WAR RECENT CRITICISM DEPRECATED “UNWORTHY ATTACK” Bv Telegraph.—Press Assn.—Copyright. Australian and N.Z. Cable Association. LONDON, November 17. Presiding at a meeting of the English, Scottish, and Australian Banx shareholders, Mr Andrew Williamson, referring to the pamphlet issued by Messrs Sydney Hussell Cooke and E. H. Davenport, stockbrokers, in which Australia’s loan methods were criticised, pointed out that Australia, through giving the flower of her young manhood to help in the Great War. eventually incurred an expenditure exceeding £600,000,000. Of this £267,000,000 had been repaid out of revenue, and £341,000,000 was still outstanding. Over £90,000,000 of the Commonwealth’s original war debt arose from the debt to the Imperial Government for services rendered and goods supplied in connection with the war. A great proportion hears interest at 5 per cent., and all is being repaid in semi-annual instalments, which are equivalent to a further 1 per cent, on the whole debt. WHAT OF THE ALLIES?

“Compare this with our Allies’ treatment of. us in respect of our advances to them,” said Mr Williamson: “yet now Australia is being reproached with the figure at which her debt stands, although the war debt accounts for over one-third of it. This attack, and its method of raising doubt as to the security behind the debt, is unworthy, and if it be the uninspired expression of opinion of the two joint authors it is not lacking in audacity. This unprecedented dictation from a private source through public propaganda seems to go beyond legitimate criticism, and ought to be strongly deprecated.” ECONOMIES advised Mr Williamson added that in Australia, as in Britain, industrial progress and development was 'hampered and retarded by the heavy burden of taxation. “It cannot be too strongly impressed upon the Commonwealth, and the State Governments,” he said, “that they should devote their utmost energies to effecting economies in public services, restricting increase in indebtedness to expenditure essential to the development of natural resources. Extravagance and wasteful expenditure will inevitably injure their credit.” » MR BRUCE ALSO REPLIES REMOVES MISCONCEPTION fjnanceerSYmpressed. (Received November 18, 5.5 p.m.) LONDON. November 17. The “Daily Telegraph’s” City editor says: “It is fortunate that Mr Bruce is here to deal at first-hand with the criticism of Australian finances, and we congratulate him on removing some misconceptions. There never has been any question that a rapidly-growing country like Australia had to develop in advance of its immediate needs, but there is a general impression that some ‘reproductive’ expenditure has not always been nrndent. Though the railways pay working expenses, and for the maintenance of lines in good repair, and meet nearly all interest charges on their cost, they still result in loss to the States. As an instance. New South Wales has a deficit of £1,274.000. LOAN COUNCIL’S WORK “Lenders will keenly watch workings of the Loan Council. If it controls the borrowings of the various States it will remove doubts. We are assured that future prospectuses will contain more information, and if each loan carries a sinking fund extinguishing it at the due date there will be less room for criticism of the financial policy of States and the Commonwealth. , The “Morning Post says that bankers and commercial men present were manifestly impressed by Mr Bruce’s straightforwardness and directness, and by the equally forcible observations on the same subject by Mr Andrew Williamson, whose past speeches show that he holds no brief for the Australian go^eraments. but he has been disturbed by the general attack on Australian finances. Mr Bruce has practically undertaken that fuller information shall be given in prospectuses, and he seemed almost to foreshadow that New South Wales will join the Loan Council. Bankers anf investors would welcome such a step.