MR. THEODORE’S THREAT

Sun (Auckland), Volume III, Issue 835, 2 December 1929, Page 10

MR. THEODORE’S THREAT

j OFFICIAL INTERFERENCE IN FINANCE

COMMENT IN LONDON United P.A.—By Telegraph—Copyright LONDON, Saturday. Banking circles in London are displaying considerable interest in the proposals made by Mr. E. G. Theodore. Federal Treasurer, in introducing tin? Commonwealth Bank Amendment Bill, and tho views expressed by some bankers are reflected in the criticisms of the financial newspapers. Thus, the “Financial Times” describes one passage of Mr. Theodore’s as carrying a threat of direct official interference in financial matters, which definitely accords with the socialistic view that banking policy is a national matter, and as such should be directed jby the Government. But this is likely j to be viewed elsewhere with consider - | ablo misgiving. ; Tho “Financial Times” continues: j “The Government of Australia is undoubtedly faced with a difficult situation. partly a legacy from the past, partly the outcome of forces impossible to control. The great need of the moment is an improvement in the country’s trade position. But that will not be brought any nearer by tampering with the recognised machinery of international commerce.”

The “Financial News” says everybody is agreed that the concentration of gold in the hands of tho Commonwealth Bank i& a highly desirable development, in full accord with modern principles. What is open to criticism is the Government's intention to take power to suspend the free export of gold, or at least to reserve the right to veto any gold shipment of which it disapproves. It would be highly regrettable were another British Dominion to imitate Canada’s example of playing tricks with the gold standard. The immediate cause of the efflux of gold from Australia, says the “News,” is the adverse trade balance, and but for unsettled conditions in the international financial markets the gap could easily be filled by borrowing in London. The adverse conditions will not last for ever, in fact, there is reason to hope for a change for the better before long, so it would be a very shortsighted policy to take emergency measures of such a nature as to react permanently on the country’s credit.