UNHAPPY TASK.

Auckland Star, Volume LXI, Issue 194, 18 August 1930, Page 7

UNHAPPY TASK.

AUSTRALIAN FINANCE

British Expert to Prescribe

Remedy.

DANGER OF DEFAULT.

(United P.A.—Electric Telegraph—Copyright*

SYDNEY, August 17.

Sir Otto Niemeyer, the Bank of England financial expert, so far has not publicly announced his prescription for easing Australia's financial difficulties. However, there is ample evidence that the specific object of his private conferences with the Prime Minister, Mr. J. H. Scullin, as

Acting-Treasurer, and with the Australian Loan Council, was in the nature of a solemn injunction to put their house in order.

The Treasurers of all the States have since set about the task of trying to balance their Budgets. This has meant severe retrenchment and economies with threats of more to follow.

The Governments of all the States naturally are greatly perturbed, and business" and private life never have been so agitated as now. The average man about town will be glad to see the last of Sir Otto, whom they playfully dub "our bailiff."

Sir Otto has not yet finished his unhappy task, however, for in the coming week he is to renew acquaintance with the Loan Council at Melbourne, and on the decision of that conference depends whether Australia shall continue in the position of being liable to be put in default any day.

The financial editor of the Sydney "Morning Herald" points out that if the Governments take steps to reduce the cost of production and to abstain from entering the overseas capital market except iov funding or renewal, and if they raise money locally only for works which will become reproductive within 12 months, then overseas creditors, if they deem these steps adequate, will give facilities to extend the period of the present floating debts in order that funding may take place. The alternative is the clanger of default and the exclusion of Australia from borrowing on the London market.

The writer savs there are at present overdrafts totalling £25,000,000 with London banks payable on demand and £5,000,000 of Australian Treasury bills fall due on August 31.