Evening Post. WEDNESDAY, APRIL 1, 1931. HARD FACTS AND HOT AIR"

Evening Post, Volume CXI, Issue 77, 1 April 1931, Page 10

Evening Post. WEDNESDAY, APRIL 1, 1931. HARD FACTS AND HOT AIR"

It seems a safe conjecture that never since the War has Australia, nor perhaps has any other Dominion, excited such cheering in the House of Commons as that which greeted Mr. Thomas's announcement that the Commonwealth would provide the interest payments which New South Wales had declined to do. The enthusiasm of the politicians is fully shared by the Press and the money market. We are told that the Stock Exchange at once reacted favourably, "Commonwealth Jives sharply advancing with a general increase of 5 per cent.," and that timid bondholders who, regardless of the fact that they had the Commonwealth guarantee behind them, had sold their bonds in a panic were buying them back at increased prices. The recovery of the State bonds which Mr. Lang's dishonesty had. depreciated was natural and inevitable, but less obvious and much more important is the fact that, though the already overburdened Commonwealth is paying to-day the £729,000 which New South Wales should have paid, and its guarantee covers an annual liability of £7,479,000, representing the same State's obligations for overseas interest, the extra burden has improved the credit of the Commonwealth itself instead of depressing it. The simple explanation of this superficial paradox is that London has never doubted the ability of the State and the Commonwealth to meet their respective obligations, but that very grave doubts had been thrown upon their will to pay by the action of Mr. Lang. In private life he must have learned to respect honesty as a virtue, and in his business as a land agent he may be presumed to have learned its value as a commercial asset, but that, whatever view a State may lake of the moral law, it cannot afford to be dishonest is a truth which he has not grasped. It is the proof which the Commonwealth Government has supplied of its firm grasp of this truth that has saved the credit of both the Commonwealth and the State from the ruin with which the public dishonesty of Mr. Lang threatened both. With our congratulations to Mr. Scullin and the people of Australia on the manner in which he has vindicated their honour, condolences must be added on the price which they have to pay in a heavy addition to their financial burdens! and on the injustice which must be more galling still. New South Wales is both the most populous and the wealthiest of the six Australian States. Her population is 39 per cent, of the total, and before the slump her public revenue, which exceeded that of any two of the other States combined, represented exactly the same proportion of the aggregate State revenues. On the other hand, the expenditure of New South Wales under the Lang administration has been far more extravagant than that of the other States, whether under Nationalist or under Labour Governments. The other Labour Premiers have, indeed, been loyal to the recommendations of Sir Otto Niemeyer as approved by the Melbourne Conference. In Victoria Mr. Hogan's valiant attempt to balance his Budget would have come very near success if it had not been thwarted by his own caucus and the Melbourne Trades Hall. And the fact that Mr. Hill and all his colleagues stood their trial before the last Australian Labour Conference as "traitors to the workers" is sufficient evidence of the loyalty of South Australia's Labour Ministry to honest and solvent government. When, therefore, we read that the Commonwealth Government has taken over the oversea debts of New South Wales, it simply means that the burdens of the five other weaker and poorer States are proportionately increased, and that those of them in which the Labour Parly is in power can claim 2io exemption. Their economics are taxed to feed Mr. Lang's extravagance, and if the restrictions which the Legislative Council and the Courts have for the present imposed upon it are removed, this outrageous burden will be increased- by what will then be an almost unchecked despotism. That such a state of things will be allowed to continue is plainly impossible. The revolt of the Riverina farmers from the town-bred and town-run tyranny of Mr. Lang—those gallant, loyal men who, while confessing that many of them are "broke," declare that they will never stand for repudiation —may not result in the secession from New South Wales for which they are working. But if the Lang Government survives the next General Election, the revolt of the other States from a federal association with New South Wales seems certain to become a burning question for each of them. That each Slate is entitled to have just as bad a Government as it pleases is one of the implications of democracy, but a federation which compels well-governed States to pay

for the bad government of others is neither democratic in theory nor possible in practice. From the great constitutional problems which may soon become as important for Australia as the financial and economic troubles that are forcing them lo the front, we may turn to much smaller points which are nevertheless of special interest lo New Zealand. In the first place, as a Melbourne message informed us yesterday, the Pull Court of the Commonwealth Arbitration Court has granted a number of applications for a reduction of 10 per cent, in wages prescribed in certain industries. In other cases consideration is reserved, but in none of the cases was tho application refused. , When "for reasons of national emergency" the Commonwealth Arbitration Court began these cuts in an important judgment delivered on the 22nd January, the Sydney Trades and Labour Council, after a heated argument, decided to arrange for a general strike, while a large minority favoured asking the Federal Government "to disallow the finding." Mr. Scullin and his Attorney-Gene-ral made a feeble and futile attempt to have the decision altered, but very wisely took no further action, and the resolution of the Sydney Trades and Labour Council proved to be nothing more serious than hot air. It was, however, not hot air but hard business with which the corresponding body in Melbourne dealt in the resolution reported yesterday. The Melbourne Trades and Labour Council has, of course, as it was bound to do, strenuously opposed the Arbitration Court cuts. It has also, in pursuance of the policy already mentioned, blocked the Hogan Government's economies by prohibiting any dismissals, salary reductions, or rationing in State enterprises: But, undeterred by what has been called "the doubtful virtue of consistency," it has decided to apply to its own staff the very principle which it had J previously attacked. To meet the economic circumstances the Trades Hall Council has reduced salaries of its employees by 10 per cent., which was the rate fixed by the Arbitration Court. As theorists, the Melbourne Trades and Labour Council had attacked the Arbitration Court; as men of business and common sense, they have decided to go and do likewise. If our own Labour Party were not too busy making martyrs of themselves yesterday they must have read that Melbourne message, and it would be interesting to know what they thought about it. Are the Scullin Government traitors to the Labour movement because they have let the 10 per cent, cut go without legislation or resignation or effective protest? Has the Melbourne Trades Hall Council betrayed the Labour movement by subjecting its own staff to a 10 per cent., cut? Does Mr. Forbes deserve all the execration heaped upon him during the last two or three weeks for adopting the same principle? Or has all that fierce rhetoric any more substance in it than hot air?