CREDIT OF AUSTRALIA

Taranaki Daily News, 19 November 1926, Page 7

CREDIT OF AUSTRALIA

RECENT ATTACK RESENTED DEBT INCURRED IN THE WAR CRITICISM UNWARRANTED By Telegraph—Press Assn. —Copyright. London, Nov. 17. Presiding at a meeting of the English, Scottish and Australian Bank, Mr. Andrew Williamson, in referring to the pamphlet recently published condemning Australian borrowing, pointed out that Australia, through giving the flower of her young manhood to help in the Great War, eventually incurred an expenditure exceeding £600,000,000. Of this, had been repaid out of the revenue, while £341,000,000 was still outstanding. • Over £90,000,000 of the Commonwealth’s original war debt arose from the debt to the Imperial Government for services rendered and goods supplied in connection with the Great War. A great proportion bore interest at 5 per cent., and all was being repaid in semi-annual instalments, which were equivalent to a further 1 per eent. dn the whole. “Compare this with our Allies’ treatment of us in respect to our advances to them,” said Mr. Williamson, “and yet, now Australia is being reproached with the figure at which her National Debt stands, although the war debt accounts for over one-third of it. "This attack and its method of raising doubt as to the security behind the debt, is unworthy and, if it be the uninspired expression of opinion of its two joint authors, it is not lacking in audacity. This unprecedented dictation 1 from a private source through public propaganda, seems to go beyond legitimate criticism, and ought to be strongly depreoaterl.” Mr. Williamson added that in Australia, a® in Britain, industrial progress and development was hampered and retarded by the heavy burden of

taxation. ..“It cannot be tooimpressed upon the Commonwealth and State Governments that they should devote their utmost energies to effecting economies in the public services and restricting the increase in indebtedness to expenditure essential to the development of natural resources. Extravagance and wasteful expenditure will inevitably injure National credit ” Received Nov. 18, 5.5 p.m. London, Nov. 17.

The Daily Telegraph!® city editor says: “It is fortunate that Mr. Bruce is hero to deal at first hand with the criticism of Australian finance®, and we congratulate him on removing some of the misconceptions that had arisen.

"There never has been any question that a rapidly growing country like Australia had to develop in advance of immediate needs, but there is a general impression that some ‘reproductive’ expenditure has not always been prudent. Though the railways pay working expenses and for the maintenance of the lines in good repair, and meet nearly all the interest charges on their cost, they still result in a loss to the States. As an instance, New South Wales has a deficit this year of £1,274,000.

"Lenders will keenly watch the workings of the Loan Council. If it con-' trols the borrowings of the various States it will remove many doubts. "We are assured that future prospectuses will contain more information, and if each loan carries a sinking fund extinguishing it at due date, there wil! be less room for criticism of the financial policy of the States and the Commonwealth.”

The Morning Post says: “The bankers and commercial men present were manifestly impressed by Mr. Bruce’s straightforwardness and directness, and by the equally forcible observations on the same subject by Mr. Andrew Williamson, whose past speeches show that he holds no brl'f for Australian Governments, bijt had been disturbed by the general attack on Australian finances. 'Mr. Bruce has practically undertaken that fuller information shall be given Jn prospectuses, which seemed almost to foreshadow New South Wales joining the Loan Council. Bankers and investors would welcome such a step.”