INTEREST REDUCTION

Dominion, Volume 24, Issue 209, 1 June 1931, Page 9

INTEREST REDUCTION

Opposed in Australia VIEW OF OPPOSITION Described as Repudiation BAD COMPULSION POLICY By Telegraph—Press Assn.—Copyright. (Rec. May 31, 5.5 p.m.) Sydney, May 31. Mr. J. A. Lyons, Leader, and Mr. J. G. Latham, deputy leader of the Federal Opposition, have addressed a letter to the Prime Minister in which objection is made to a proposal now before the Premiers’ Conference to compel the conversion of internal loans at a reduced interest, They describe it as repudiation, the effect of which already is obvious on the Stock Exchanges in Australia and abroad. „ ... “Persistence in the advocacy of this policy will, we fear, make an honourable, voluntary conversion impossible; also greatly prejudice the success of any new loan to assist farmers and the unemployed,” they add. “We therefore appeal to the conference to consider with the utmost, care and sense of responsibility the inevitable effect of this policy upon the financial and economic position of Australia.” t , . Mr. J. H. ScuUin will bring the letter before the conference on Monday. OPINION IN LONDON Strong Disapproval Shown Loudon, May 29. The “Financial News” says that London banking circles strongly criticise the loan conversion scheme in Australia, some contending that if a general scaling down of interest could be achieved by an appeal to patriotism, it would not be objectionable, but a differential tax applicable to holders refusing to convert is deemed to constitute arbitrary interference in contractual obligations, tantamount to partial repudiation. It is not assisting a solution of the ultimate problem, which is the funding of London indebtedness and the raising of new money, but is . aggravating the serious damage politicians have done to Australian credit..