FEDERAL DECISION

Rotorua Morning Post, Volume 1, Issue 136, 1 February 1932, Page 3

FEDERAL DECISION

(Press Assn.-

BREAKS FAITH WHENEVER IT SUITS HIM « TO BLAME IF STATE DEFAULTS

— By Telegraph — Copyright).

Rec. Jan. 31, 5.5 p.m. MELBOURNE, Saturday. When the Premiers met to-day Mr. j. A. Lyons, the Prime Minister, announced that the Federal Government had been forced to the conclusion that Mr. j. T. Lang the Premier of New South Wales, will ignore any undertaldng he has given „whenever it suits him so long as the Commonwealth is prepared to shoulder the responsibilities of the Government of New South Wales. In the circumstances, it was for the Government of that State itself to face the diffieulties which, by its own action, it had created. Thus, the Commonwealth would not provide the £500,000 required by New South Wales to meet overseas interest, and Mr. Lang must take the full responsibility if the State defaults on Monday when £958,000 is due in London. Mr. Lyons' announcement followed a meeting of the Federal Cabinet this morning, when the view taken was that the position created by Mr. Lang's demands yesterday, was bound to recur, and the only way to meet them was by immediate and drastic action. The Commonwealth Government was not prepared to support any proposal for the Loan Council to render further assistance to New South Wales, "Mr. Lyons said. It considered that Mr. Lang had made no serious attempt to honour his obligations under the Premier's plan, and had broken his undertaldng to reduce State expenditure. Mr. Lyons said the action to be taken was in the interest of the credit of the Commonwealth and the State and he did not fear any wrong construction being placed upon it abroad.