NOT GOOD SECURITY

Evening Post, Volume CXVI, Issue 84, 6 October 1933, Page 7

NOT GOOD SECURITY

AUSTRALIAN BONDS ATTACK BY AMERICAN i; ' LONDON, September 25". I. Mr. F. E. Shortis, formerly vicepresident of. the Guaranty, Trust C 0.., of New York, has sent a letter to Mr. S. M. Bruce regarding the repudiation of the gold clause in the payment of dollar bonds. ■* . . : "When Australia flagrantly repudiates Her irrevocable obligations^ in one country, while meeting them in another, the discerning public will not accept unreservedly the flattering tributes the Press have, paid to the Commonwealth's honour," says, Mr. Shortis. The writer says he has arranged for Mr. Neville Chamberlain, Chancellor of the Exchequer, to be asked in the House of Commons to remove Australian securities from a trustee status, as there is no guarantee to fulfil obligations. Also Mr. Shortis has sent a letter_ to the Commonwealth Government, stating that, as the majority of the bonds are held by British investors, "immoral repudiation" will affect the Commonwealth '3 prestige as though a British issue weve repudiated. . ' '\ . Mr. Shortis has written a third letter to Mr. Pierpont Morgan, censuring him for advising the Commonwealth to repudiate the gold clause, especially as it is the duty of the issuing house to see that ■ full legal recourse is obtainable in the.event of defalcation. Mr. Bruce declined to discuss the point, saying it was a matter for the Prime Minister (Mr. J. A. Lyons).