NO BORROWING.

Auckland Star, Volume LXIII, Issue 282, 28 November 1932, Page 5

NO BORROWING.

CABINET'S DICISION ? WRITING-DOWN OF CAPITAL TASK BEFORE COUNTRY. (By Telegraph.—Parliamentary Reporter.) WELLINGTON, this day. It was made clear by the Prime Minister to-day that it is not the intention of Cabinet to invite representatives of the rural section in the House to confer with it in its search for a solution of the present difliculties facing primary producers. Mr. Forbes said the problem bristled with complexities. The task facing any scheme wa 6 the bridging of the gap of 51 per cent which existed between the export price and internal retail price levels.

Although Ministers generally are reticent on this point, there is growing belief that before the country as a whole can obtain permanent relief a wholesale writing-down of capital, involving widespread reorganisation, will have to be undertaken, in conjunction with a similar readjustment of external debt charges. How far Cabinet is prepared to give an early lead on any of the issues entailed in such a rehabilitation programme cannot be conjectured upon at present, but it is believed the Ministry has set its face resolutely against any further borrowing, either internally or on the London market.

One important factor which is understood to have been prominent in Cabinet discussions on the farmers' position is the effect that anything which might be done to raise prices might have on the other Dominions and on Britain. The spirit of the Ottawa Conference was in the direction of raising pricc levels, and it is considered that joint Empirifc action, rather than individual Dominion action, must be the keynote.