Australia and the Bank of England.

Press, Volume LXVI, Issue 19979, 14 July 1930, Page 10

Australia and the Bank of England.

The visit of Sir Otto Niemeyer to Australia, as the head of a Mission from the Bank of England, is such an unusual event that it would he easy to misjudge its significance. There can be little doubt, however, that its first and last purpose is to make arrangements, if it seems to the Bank that this can be done safely, to tide Australia over the most difficult stages of the period of financial adjustment that the Commonwealth is now facing. To pay interest on her loans Australia has to And thirty millions sterling, and can lio longer do so by the raising of further loans. Even her gold reserves cannot be exploited much further without dangers to the currency, and exportable goods, which represent gold, such as wool and wheat, will not be available in any large quantity for shipment abroad until the coming season. In the meantime the interest bill has to be met, and there can be no doubt that Sir Otto Nieraeyer's mission is to consider on the spot how far the Bank of England may*jjo in arranging accommodation for the intervening period. It has been stated unofficially, but on good authority, that if Australia will agree not to obtain loans outside the Commonwealth for three years, the Bank of England during that period will guarantee interest and sinking fund on existing overseas loans. The Melbourne Age has suggested that it might be the purpose of the Mission to attempt to interfere

with Australia's economic and industrial direction, and to influence phases of national policy by compulsion rather than by persuasion, but this has been definitely denied. It is of course not likely that the Bank of England, or any other financial institution, -will offer accommodation unless it is satisfled that the Commonwealth is prepared to live within its income and that its Government will be strong enough to compel it to do so.