AUSTRALIA'S DEBTS

Sun (Auckland), Volume IV, Issue 1070, 6 September 1930, Page 11

AUSTRALIA'S DEBTS

QUESTION OF REPUDIATION HOT TO* BE CONSIDERED Messages from across the Tasman to the effect that a certain section of Australian political circles favours, and will work for at the forthcoming elections, a repudiation of Australia's overseas debt. have caused considerable alarm in financial circles. In London, New Zealand, and wherever Australian stocks are quoted, the market for Australian securities has registered a sharp decline over the past few days In view of this, an expression of pinion on the subject by the Melbourne “llerald" makes interesting reading. Under date August 26 this journal discounts all suggestions that the Australian community would stand for any denial of liability for overseas obligations.

i uere are a lew irresponsible* connected with the Sydney Trades Flail who are ready to go far in the quest for notoriety," states the ‘‘Herald." ‘‘Their politics are foreign and the laughingstock of Australian workers. Coming from them, suggestions of repudiation of any part of the country’s obligations are unworthy of notice. They are only samples of the “red fool fury" that is occasionally heard from a hopeless minority in every English-speaking country. The only reason why they merit reference now is their possible effect on the New South Wales Labour Party’s election programme. Mr. Scullin expressed the Australian view immediately before, lie left for England. ‘The Federal Labour Government,’ he said, ‘is determined, to honour the debt and maintain Australia’s personal honour. No nation could default without creating havoc and adding to the misery of unemployment by creating chaos in business, commercial and industrial walks.’ This is an honest statement, and is approved by all classes as plain common sense. “In Australia people shun even the word ‘repudiation,’ as conveying a shameful suggestiveness. Should the Sydney ‘reds’ manage to taint the State Labour policy by even a hint of its possibility, in any form or to Any degree, the party will inevitably

incur widespread odium. The national honour and the State honour are sacred possessions, with which no honest or prudent man can dare to tamper. Were an Australian State to deny its loan contracts it would at once become a defaulter and a bankrupt. Many thousands of wage-earners and others who have entrusted their savings to the Savings Banks, which have in their turn invested them in Government loans. would be the victims of State robbery. All those who were urged by Labour and other Governments to put their savings in Government stocks and bonds, would be despoiled in the same way. Further Government borrowings at home or abroad would be out of the question; investments of outside capital would bo discouraged by a barrier of dishonour. Industry and business would collapse: unemployment and want would represent the common experience. FORCED REDUCTION DANGEROUS “Obviously a forced reduction of interest would be as dishonourable and dangerous as repudiation wholesale, for it would mean confiscation of a part of the security—a deliberate lessening of the loan certificate’s value. No Government could dare to coquette with the policy of dishonour and still pay its way. State finances would be cast into chaos, and all those who draw salaries and wages from Government would share in the general ruin. Australia could not default in any way or to any degree without cutting itself off in shame from the British Commonwealth of nations and without sacrificing its White Australia ideal. Australians know this, and marvel at the folly of the few who hint that the debacle is within the bounds of sanity. Mr. Lang requires to speak on this matter as decisively as Mr. Scullin has spoken. Otherwise ho must expect the relentless opposition of a sane and honourable people."