INTEREST ON LOANS

Evening Post, Volume CXI, Issue 73, 27 March 1931, Page 10

INTEREST ON LOANS

THE LANG DECLARATION

COMMENT IN LONDON

United Trees Association—By Electric Telegraph— Copjrlgut. (Received 27th March, .2 p.m.) LONDON, 26th March. Following the load of the evening papers, the morning papers give startling prominence to Mr. Lang's declaration. The "Daily Express" and other papers feature it on the front page, with bold headlines. Fortunately, however, the reasoned comment of financial editors relieves the starkness of the bare declaration. The "Morning Post's" financial editor devotes a column to comment under the heading: "Australian Bombshell" to "This more serious definite news than any in recent times from. Australia." The paper adds that there is no precedent to such repudiatory action' in any section of the Dominions. It agrees that the anxiety roused by this startling and regrettable declaration is lessened by the knowledge that the Commonwealth is in no way relieved of its responsibilities to the holders of Australian State loans. Notwithstanding the bombshell, therefore, there is a general expectation either of retraction by Mr. Lang or that the interest will be met from Commonwealth funds. Everyone naturally . desires that New South Wales accept its responsibilities of its own accord. The pity is that there should bo such a mishandling of the situation to tho injury of Australian credit, which has not, however, been injured beyond remedy. There is greater recognition here than seems to be appreciated by some Australian statesmen not only of the difficulties through which Australia is passing, but of the extent to which some of them &Te connected with the world depression.. On this point he refers to the "excellent speech at the Bank of Australasia meeting" and proceeds: "For a reason that is difficult at this distance to follow there seems a disposition on the part of Mr. Lang to create an impression in Australia, that the difficulties are increased by undue banking pressure here. This is untrue. England is too deeply concerned in the credit of Australia not to stretch many points to aid the country, in its crisis. Unfortunately, the question ■of finance and credit has become entangled, in Australia with party politics. Up to the present it has nofe been possible to render all the assistance which we are sure might have been rendered but for spasmodic threats of financial suicide, for that is what it would amount to on the part of those in Australia who talk lightly of repudiation of debt obligations." The "Daily Express's" financial editor warns thousands of investors in. New South Wales and ■ other Australian stocks to treat Mr. Lang with the greatest reserve. It emphasises the Commonwealth's obligation, ■ despite anything said and done by Mr. Lang. While the situation in Australia is undoubtedly extremely difficult, the bondholders must remember that the vast body of Australian opinion is strongly opposed to any form of repudiation. The "Dnily Telegraph's" financial editor says that throughout the development of Australia's difficulties the Cityhas adopted a tolerant and helpful attitude, but indignation is controlled with some effort on the disclosure that while Mr. Lang, has been making arrangements for the payment of indebtedness to New York, he proposed to default on sums due to the Westminster Bank and the Baik of England.