AUSTRALIA PAYS

Sun (Auckland), Volume III, Issue 885, 31 January 1930, Page 9

AUSTRALIA PAYS

LOW CREDIT LEVEL IN UNITED STATES BRIGHT SPOT REVEALED United P.A.—By Telegraph—Copyright NEW YORK, Thursday. There is one bright spot in Australia’s financial position here. It is learned on excellent authority that the Boston banks have just arranged some credits for a contemplated purchase of Australian wool. It is understood that the New England textile interests have decided to enter the market, and this may offer some temporary relief. There is strong conviction here that the Australian banks will continue the drastic curtailment of credits to local merchants for financing time payments on luxury goods, notably motorcars. This is expected to reduce further the Australian imports of American manufactures. Exporters here look upon this, and upon the fact that Australians will make a voluntary effort to curtail all imports, as an essential step to the redress of the unfavourable trade balances, as certain to happen. EXPORT OF CAPITAL

There are, however, some fears expressed concerning the possibly serious results of the actual export of capital from Australia at the present time. Should this continue, the feeling is that It will prove even more difficult for Australia to overcome the economic depression. It is necessary to make it clear that while the Australian situation is frankly canvassed here by financiers, who do not hesitate to reaffirm that loans wiil not prove the remedy, and that they themselves -would hesitate to undertake any Australian flotations at the present time, no matter on what terms, their confidence in the soundness and basic economic strength of the Commonwealth and its people is in no way diminished. A somewhat steady downward pressure is being exerted on Australian credit in. New York, particularly as reflected by the prices of the Commonwealth stocks and the difficulty of securing the transfer of funds to and from Australia, owing to the exhaustion of bank balances. Business houses intimately familiar with Australian and American trade, moreover, look forward to continued stringency to the end of the year. DIFFICULTIES OF TRANSFER

It is learned that the last purchases of bonds made here on account of the Australian sinking funds were made on June 30. Doubt also is expressed whether sufficient funds are available at the present time for any extensive purchases, sufficient to have any appreciable effect on prices. As concerns money transfers, which merchants say they now arrange with the greatest difficulty, and for which they must “pay through the nose,” the conditions are expected to grow worse before they become better. Bank balances are pretty widely exhausted, and as it is generally expected that Australia will stringently curtail her imports from America during the year, and as the recent American financial collapse has reduced American purchases of raw materials abroad, nothing like an improvement can be in sight. MARKET IN SYDNEY SYDNEY, Thursday. A good deal of selling pressure was noticeable on the Stock Exchange yesterday. Many investment stocks fell in price, including Commonwealth loans and bank and industrial shares. Commonwealth 5J per cent, bonds, 1941, rose 2s 6d, but 5$ per cent, bonds, 1935, fell ss, and 5J per cent, bonds, 1939, declined 6s 3d. Other stocks that fell were ißank of New South Wales, by 22s 6d, Union Bank, 16s 3d, and Colonial Sugar Refilling Company, 7s 6d.