Could Ruin Australia

Sun (Auckland), Volume IV, Issue 1055, 20 August 1930, Page 9

Could Ruin Australia

POWER OF LONDON BANKS Experts Resent Rumours STATES AROUSED BY ECONOMIC PLIGHT REPORTS that three banks in London could call up Australia’s credit and send the Commonwealth bankrupt are emphatically denied in London. The urgency of drastic remedial measures for Australia’s economic plight is being urged by Sir Otto Niemeyer. who is conferring with the Federal and State political leaders on the credit position.

United P.A. —By Telegraph—Copyright Reed. 10.40 a.m. LONDON, Tuesday. Australian financial circles in London protest strongly against statements contained in a cablegram from Sydney published in the “Daily Telegraph.” Particularly are they surprised at a statement to the effect that political writers have said three London banks, in addition to the Bank of England, could call up the Commonwealth’s overdrafts and make Australia bankrupt. This is a wild exaggeration of the position, and it is outside the power of any of the banks to take such extreme action even if they desired to do so. The “Financial Times” publishes a cable from Australia saying that only two banks in London hold overdrafts for Australian Governments, namely, the Westminster and the Commonwealth. Neither Is likely to prejudice the position of Australia in the matter of finance; The paper editorially expresses the hope that the Commonwealth and the States will reach an agreement which will certainly accentuate the recent improvement in Australia’s credit. FINANCE HEADS CONFEP. A Melbourne messays says tlie outcome of the financial conference between Federal and State Ministers in the presence of Sir Otto Niemeyer, of

the Bank of England, is awaited with the greatest Interest throughout Australia. The unfortunate absence from the conference through illness of the Prime Minister, Mr. J. H. Scullin, has rather complicated the position. Mr. J. E. Fenton, Minister of Customs, is acting for him. The Premiers and Treasurers are reported to have expressed resentment today when they learned that no steps had been taken by the Federal Government to meet the £5,000,000 of Treasury bills due on August 31. They fear Australia will be posted as a defaulter nation. Mr. Fenton attempted to explain the recent financial actions of the Federal Ministry, but it is understood that the State Ministers were not the least impressed by his outline of the position. SCULLIN SHOULD STAY

Some of the Ministers present indicated plainly their aispleasures at the Commonwealth Government's inactivity, and there was an insistent demand that Mr. Scullin should abandon his trip to London. Sir Otto Niemeyer contented himself with giving an outspoken analysis of Australia’s serious financial plight. He urged decisive action to meet commitments falling due in London before the end of the present year. There is now a disposition at the conference to appoint a committee of responsible Ministers to take charge o£ the financial situation.