AUSTRALIAN FINANCE

Evening Post, Volume CX, Issue 42, 18 August 1930, Page 9

AUSTRALIAN FINANCE

IN DANGER OF DEFAULT

EVERYBODY AGITATED United Press Association—By Electalo Xtl*«raph—Copyright. SYBNEY, 17th August. Although Sir Otto Memeyer, the Bank of England financial expert, so far has not publicly announced his prescription for easing Australia's financial difficulties, there is ample evidence that the specific object of his private conferences with the Prime Minister, as Acting-Treasurer, and the Australian Loan Council was iv the nature of a solemn injunction to put their house to order. Treasurers of all the States have since set about th© task of trying to balance their Budgets, which means severe retrenchment and economies, with threats of more to follow. The Governments in every State are naturally greatly perturbed, while business and private life has never been so agitated as now. The average man about town will be glad to see the last of Sir Otto/ whom they playfully dub "Our Bailiff." Sir Otto, however, has not yet finished his. unhappy task, for in the coming week he renews acquaintance with the Loan Council in Melbourne, and on.the decisions of that conference depends whether Australia shall continue in the" position of being liable to be put in default any day. . The financial editor of the "Sydney Morning Herald V points out that if the Governments take steps to reduce the cost of production and abstain from entering the overseas capital market except for the funding or renewal of loans and raise money locally only, for works which will become reproductive within twelve months, then, the overseas creditors, if they deem these steps adequate, will give facilities to extend the period of the present floating debts in order that funding may take place. The alternative is a danger of default and the exclusion of Australia from borrowing on the London market. There are at present overdrafts totalling £28,000,000 with London banks, payable on demanfl, and £5,000,000 of Australian Treasury bills fall aue on 31st August.