AMERICAN EXAMPLE

Evening Post, Volume CXV, Issue 109, 11 May 1933, Page 11

AMERICAN EXAMPLE

PAYMENT JN PAPER

AUSTRALIA FOLLOWS

LONDON, May 3. There was less tendency today on the part of disappointed holders to condemn Australia's payment in paper dollars of the interest on tho New York 4J per cent, loan repayable in 1956, because the view is taken that tho American Government itself created a precedent by detaching tho dollar from gold, ■'. There'is also a widespread view that there is an exact analogy in tho casedecided in .the British Appeal Court on March 17 concerning a Belgian company which in 1928 issued gold bonds providing for the payment of interest in sterling in gold coin of tho United Kingdom of or equal to the standard weight of fineness then existing. Tho appellants claimed that the payments must bo sufficiont to buy the requisite sum of gold coin in the open market. Mr. Justico . Farwell, in tho Lower Court; held that tho obligations were discharged by offering what happoned ■to be the legal tender at the time. Tho Master of Bolls uphold this view in the Appeal Court, on tho ground that the law had withdrawn gold frojn circulation, and replaced it with bank notes. .. . ■* It is understood that this is also the view of Australian Government circles, but somo bankers contend that the obligation was contracted in gold, and should bo discharged in gold.