AUSTRALIA’S TROUBLE IS A WORLD TROUBLE

Sun (Auckland), Volume IV, Issue 1065, 1 September 1930, Page 9

AUSTRALIA’S TROUBLE IS A WORLD TROUBLE

GOLD IS BASIC CAUSE CRITIC SEEKS REMEDY United P.A.—By Telegraph—Copyright VANCOUVER, Saturday. The Vancouver “Sun’ says the world is interested in Australia’s financial problems, because wliat is handicapping Australia is also worrying the world. The newspaper says: “The left wing of the Australian Labour Party has suggested the repudiation of Australia’s debts, a live years' moratorium, and the mobilisation of community credit. “This is the first oflicial ‘squawk’ that has been made by a responsible debtor nation, but it is a squawk that will be repeated around the western world, if there is not made quickly realignment of the world’s credit and a new appraisal and a fresh apportionment of the world’s metallic money, silver and gold. “The debt owed by Australia is serious. Australia, however, with her great producing areas, is probably in a much better position to pay her debt than is England. LACKS BUYING POWER What is bankrupting Australia is also bankrupting and paralysing all the large producing nations of the world, that is, lack of world buying power. “What is causing the lack of world buying power is the unsound distribution of world credit and the refusal of European bankers to recognise the necessity for restoring silver as a 1 to 3 2 world money token with gold. “There are £2,000,000,000 worth of gold in the world, and through hoarding restrictions, embargoes, and the. mad scramble for gold the yellow metal is getting into fewer and fewer hands. FORCED OUT OF MARKET “China, India, South America and those oilier countries that have only silver money and have small world credit and have had the buying power of their silver cut to 25 per cent, of its value in 1870, are gradually being forced out of the market for world commodities. “This reduction in the purchasing power of the silver money countries is the reason why world trade is slackening off and is why surpluses of goods everywhere are piling up and it is the real reason why world trade faces stagnation. “Must'Australia go bankrupt, or will the Australian surpluses again start moving to the world markets? How else than by restoring the buying power of Asia and other silver countries can England’s economic peril be averted? STABILITY OF STERLING “If it has been sound business for the world to allow small population like that of Australia to pile up a debt of £1,200,000,000, surely it is necessary and good business, for the international bankers to restore silver and establish credits that will start the world surplus of commodities moving toward the millions of feet and of backs that are bare and the mouths that are hungry among the hundreds of millions of people in Asia. “If the pound sterling is not to go the way of the French franc, the German mark, and the Russian rouble, there is urgent need for international bankers and the so-called world leaders to prove themselves worthy of their responsibilities.”

NO GIFT COMING

A WORD FROM BRITAIN LONDON, Saturday. The proposal of the executive of the Australian Labour Party that the Prime Minister, Mr. J. H. Scullin, should appeal to Britain for a readjustment of Australia's war debt raises very grave issues, says the “News-Chronicle.” It says it greatly doubts whether any British Government dare accede to such a request. “Britain is up against hard times,” says the paper, “with no immediate prospect of recovery. Unlike Australia we have kept on the rails in our national finances, but we simply cannot go on playing 'fairy godmother, even to our own kin. During the war Australia treated her fighting forces with lavish generosity, and in the matter of debt we have treated her with real consideration. “The proposal means that now that it is no longer possible for Australia to borrow we should present her with a substantial gift. That is not Sir Otto Niemeyer’s remedy.” The “Economist” commends Australia for the adoption of Sir Otto Niemeyer’s plans and comments on the earlier difficulties of the Common wealth and New Zealand from 1878 onward. The paper says the\ solution of those difficulties by each country brought improvements in their banking policy, till now they are in a very sound position. The time is ripe, it adds, for another advance in the direction of a central bank in each of the Dominions linked with the Bank of England. This would prevent a crisis such as the present one, notably by forestalling exchange difficulties.