FACING HER CREDITORS

Sun (Auckland), Volume IV, Issue 1044, 7 August 1930, Page 9

FACING HER CREDITORS

AUSTRALIA SEEKS PLAN FOR CREDIT ABROAD MUST WATCH SPENDING CANBERRA, Wednesday. The Loan Council held a vital meeting today and adopted a plan for the mobilisation of credit in London to assist the Commonwealth to meet its obligations promptly. The Prime Minister, Mr. J. H. Scullin, said there would be a special conference between the various Premiers at Melbourne on August 18 to go into the question of balancing the States’ Budgets. Sir Otto Niemeyer, the Bank of England’s representative, took part i?i the Loan Council’s deliberations. It is understood he advised that there should be strict supervision over expenditure. The Select Committee appointed by the Senate to investigate the Centrai Reserve Bank Bill recommends that an opinion on the measure should be sought from Sir Otto and tnat it should be deferred until next year. DANGERS OF NEW BANK The report of the committee says there is an overwhelming volume of evidence opposed to any drastic change in the present critical period. Strong exception was taken by witnesses to the method of appointing the Board of Management owing to the danger of the exercise of undue political influence, and the fear was expressed that the powers given to the bank to make advances would lead to unsound practices. The committee said it was convinced that no good purpose could be served by such a bank, and that considerable harm could result from its establishment.

The committee further reported that there was unanimity of opinion among tiie witnesses that a central reserve bank would be i. desirable adjunct to the financial system of the Commonwealth provided that it performed the true functions of central reserve banking and was assured of immunity from political control. At the same time there was nothing a central reserve hank could do at present which the Commonwealth Bank was not doing already in co-operation with private hanking institutions. PUSHING THE SALES TAX CANBERRA, Wednesday. The House of Representatives today passed a motion for the second reading of the Sales Tax Bill by 40 votes to 25. There was a considerable amount of protest by many members against the endless confusion they asserted this form of taxation would create among business men.