AUSTRALIAN FINANCE

Feilding Star, Volume 8, Issue 2399, 8 April 1931, Page 8

AUSTRALIAN FINANCE

NLW son’ll, WALES POSITION FLIGHT OF CAPITA!, Financial houses in Melbourne state that the police of repudiation advocated by the New South Wales Government is already having the effect of transferring capital to Victoria. Several large sums, running into six figures, have been remitted to Melbourne for investment, and numerous inquiries regarding the state of the market indicates that other amounts arc likely to follow in the near future. It is understood that Mr Lang’s proposals for an all round reduction of interest rates would have had a more immediate effect on the money market in New South Wales but or the belief that the Bill will not be passed by the. Legislative Council. But the proposals have created a feeling of unrest. “The authors of the scheme,” says the Sydney Morning Herald, “have ignored the fact that capital is mobile, that it can be shifted from place to place. There will be a flight of capital from New South Wales as and when it can be realised, and it will be transferred abroad. The flight, which was so marked between October and January all through Australia, will so far as New South Wales is concerned be . resumed. The State will he deprived of a great portion of its floating capital with which the business of commerce and industry is carried on. Interference by law wjth the market rate of interest will restrict saving, which is so necessary, to provide additions to floating capital and to provide for investment in new industry.”