LONDON OPINION.

Auckland Star, Volume LXII, Issue 39, 16 February 1931, Page 7

LONDON OPINION.

THEODORE FINANCE.

Definitely Condemned by

Bankers.

A QUESTION OP POLITICS.

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

(Received 11 a.m.) LONDON, February 15. A financial commentator writes that since the proposals for the rehabilitation of Australian finance are now a question of politics rather than finance, it is difficult to pronounce on the subject without entering the political arena. Bankers and financiers hero are disinclined towards public utterances, being most chary of the appearance of unwarrantable interference in what a section of Australian opinion might regard as largely a domestic concern. Nevertheless, financial opinion in London definitely condemns Mr. Theodore's proposals scarcely less than Mr. Lang's, though after the first shock the latter are realised to be impossible. The city argues thus: "The Commonwealth is in sore straits through the world slump in commodity prices coupled with the orgy of borrowing between 1922 and 1928. The operation of economic laws blocks the royal road to prosperity, and the only exit is in drastic cuts in Government expenditure, reduction of national costs of production and an abandonment of the traditional policy of overseas borrowing. While Australian politicians fail to face realities they cannot be helped. Thus far their utterances indicate that they are too frightened by their constituencies to adopt drastic measures or are not capable of realising the situation. London, pending an alteration in the position, cannot offer assistance which it would otherwise give most willingly. Whatever were Mr. Scullin's motives in reinstating Mr. Theodore, that move has greatly damaged his prestige here, since financiers are already familiar with Mr. Theodore's views and have always regarded them as utterly unsound, apart altogether from political considerations.