AUSTRALIAN CREDIT

Dominion, Volume 23, Issue 108, 31 January 1930, Page 11

AUSTRALIAN CREDIT

DOWNWARD PRESSURE M NEW YORK CONTINUED CONFIDENCE IN STABILITY OF COMMONWEALTH Unltad Press Association—By Electric Telegraph—Copyright. (Rec. January SO, 8.45 jam.) New York, January 80. A somewhat steady downward pressure is being exerted on Australian credit here, particularly as reflected by the prices of Conunonowealth stocks and the difficulty of securing the transfer of funds to and from Australia due to the exhausted bank balances. Business houses Intimately familia* with Australian and American trade, moreover, look forward, to a continued stringent eleven-month. It is learned that the last purchases of bonds made here on account of the Australian sinking fund were on June 30. Doubt also is expressed whether sufficient funds are available at the present time for any extensive purchases sufficient to have any appreciable effect on prices. As concerns money transfers, which now merchants “arrange with the greatest difficulty, and for which they must pay through the nose,” conditions are expected to grow worse before they become better. The bank balances are pretty widely exhausted, and as it is generally expected that Australia will stringently curtail her American exports during the year, and the recent American financial collapse has reduced the American purchase of raw materials, abroad, nothing Uke improvement can be in sight. One bright spot, however, does appear. .It is learned on excellent authority that the Boston banks have just arranged some credits for a contemplated purchase of Australian wook It is understood that New England textile interests have decided, to enter the market, and this may offer some temporary relief. There is every conviction here that Australian banks will continue a drastic curtailment of credits to local merchants for financing time paymets cn luxury goods, notably automobiles. This is expected further to reduce Australian imports of American manufactures. Exporters here look upon this and upon the Australians making a voluntary effort to curtail all imports as an essential step to redress the unfavourable trade balances as certain. There, however, are some fears expressed concerning the serious results of the actual export of capital from I Australia at the present time. Should this continue the feeling is that it will prove even more difficult for Australia to overcome the economic depression. It is necessary to make It clear that while the Australian situation is frankly canvassed here by financiers, who do not hesitate to reaffirm that loans will not prove the remedy and that they themselves would hesitate to undertake any Australian flotations”at the present time, no matter on what terms, their confidence in the soundness and basic economic strength of the Commonwealth and its people is in no way diminished.

CONFIDENCE OF CAPITAL ‘ MERITED London, January 29. The “Financial Times,” in an editorial, admits it is unfair to debit against Australian credit the influence of the monetary stringency in which practically all other countries have participated. It has been demonstrated that Australia is easily able to meet her obligations, and fully intends to continue to do so. The Commonwealth fully merits the confidence of capital, and Is entitled to freedom from factious criticism founded on little knowledge.”