M.R. STEVENS' TRIUMPH.

Auckland Star, Volume LXIII, Issue 260, 2 November 1932, Page 16

M.R. STEVENS' TRIUMPH.

CONFERENCE OF PREMIERS. EXTERNAL OR LOANS? DUEL WITH SIR ROBERT GIBSON. (From Our Own Correspondent.) SYDNEY, October 28. During the past week the Premiers have met again in conference at Melbourne, and the Loan Council has also discussed the possible methods of reducing indebtedness and raising the large sums already, agreed upon for distribution between the States to provide for public works and relieve unemployment. ' ' . .

Mr. Stevens, with his assistant treasurer, Mr. Spooner went to Melbourne resolved from the outset to oppose any scheme for raising local loans on a large scale. As Mr. Stevens has repeatedlv pointed out, to raise a large internal loan just now would .mean absorbing much of the money now available . for investment, thus raising the rate of interest and conflicting, with all the conditions that make, for our financial and industrial recovery.

Sir Robert Gibson, on behalf of the Commonwealth Bank, favoured raising £20,000,000 by internal borrowing, and he proposed to use three-fifths of this amount to reduce the total amount of Treasury bills, leaving only two-fifths for public works. This would not be enough to carry out the programmes already arranged at the last Premiers' conference, even if the loan were fully subscribed; and Mr. Stevens therefore contended that it would be wiser to raise a smaller loan for public workssay, £8,000,000 or £10,000,000, and let the Treasury bills mostly stand. In this view he was supported by tl#e trading banks, which find these bills a most convenient form of investment, and it was rumoured that, failing the Commonwealth Bank, they would be prepared to advance up to the amount proposed by Mr. Stevens at a low rate of interest on his terms.

Mr. Stevens actually succeeded in swinging the conference round to his way°of thinking, and after some resistance, and a threat of refusing to underwrite the loan if the Premiers, .were persistently obdurate, .Sir R. Gibson gave way. So a loan of £8,000,000 is now proposed, and it is, to be devoted almost entirely to public works.

But difficulty now arises about the rate of interest. Sir Robert Gibson had suggested 4 per cent, but Mr. Stevens maintains that this rate is far too high. He favours 3 per cent himself, but his colleagues apparently afraid of antagonising the Commonwealth Bank, hesitated to go below 3J per cent. Finally, as Sir K. Gibson proved unyielding, the conference offered 3| per cent as a compromise. The proposal now is to raise £8,000,000, partly to fund portion of the floating debt, partly. for public works —the currency to be 10 years, and the loan floated at par.

The present conference has been .'so far a distinct personal triuniph for Mr. Stevens; and there can be no gainsaying of either his financial ability or the courage and tenacity with which he maintains his yiews.