TO AVERT DEFAULT

Greymouth Evening Star, 7 May 1931, Page 7

TO AVERT DEFAULT

AUSTRALIAN GOLD SHIPMENTS I BANK CHAIRMAN'S ADVICE [BY CABLE —PRESS ASSN. —COPYBIGHT.] a CANBERRA, May 6. An event unique in the annals of the Federal Parliament occurred today, when Sir Robert Gibson, Chairman of the Commonwealth Bank Boaru appeared at the bar of the Senate to give the Bank Board’s view of the Commonwealth Bank Bill, under which the Ministry seeks to'ship large quantities of gold overseas. Members of the Ministry and the House of Representatives crowded the Senate to hear Sir R. Gibson’s statement. ~

He said that the Board was iff continuous communication with the Bank of England, which had no direct financial relations with the Govern ments of Australia. He confidently believed the Bank would do anything in its power to help Australia, either by influencing the market in Londo > in her favour, or helping his Board. The amount of gold held in Australia as a reserve against the note issue, proceeded Sir R., Gibson, was £15,150,000. The total of unfunded debts owed by Australian Governments in London was £38,075,000, of which £5,000,000 was due to the bill market, £2,950,000 to the Australian trading banks, £25,125,000 to .the Commonwealth Bank. From inquiries made in London, it would be very difficult to discount, the Australian bills falling due at an early date, or, if it could be done, it would be at a comparatively high rate of interest. Sir Robert emphasised that the Commonwealth could make no further shipments of gold to London without reducing the statutory reserve. The fact that the note issue would be inadequately supported would create uneasiness and loss of faith. The value of the Australian note would depend entirely upon the confidence of the people and the ability of the people to redeem the notes in some form or another. ’The country had an instance of what a loss of faith meant quite recently, although in that case the Government Savings Bank was backed by ample reserves. There was the same lack of faith in fiduciary issues. On the other hand, a gold reserve had a psychological value, and created confidence in the minds of the people and who handled the notes. Sir R. Gibson added that five million worth of bills were falling due on June 30, and there was a danger of default. He, read a letter to the Treasurer, wherein he stated that the Commonwealth Bank had already shipped five millions worth of gold to meet the needs of the Government prior to March 30. “We thought if the country must default it would be preferable to default in Australia, and not to people overseas.” Senator Barnes asked: You regard a better alternative would be a further shipment of gold. Sir R. Gibson: Undoubtedly.

V RATE OF EXCHANGE. LONDON, May 6. It is freely rumoured in business circles that the Australian exchange is very likely to be increased to 35 per cent. Australian Press Association inquiries in responsible quarters disclosed the unanimous opinion that there is no justification at present for either an increase or a decrease. ATTACK ON MRS LYONS. (Received May 7, 11 a.m.) CANBERRA, May 7. ■ There was a scene in the House of Representatives when Mr Parkhill and Mr Gabb took .exception to what they called the sneering references made earlier in the day by Mr Beasley.' to Mrs Lyons. 1 ■» Mr Eldridge, speaking of Mrs Lyons, asked the Government if people could be protected against outbursts of “exiled Queens,” and “Sairey Gamps.” The question was disallowed. Mr Parkhill declared it was the first time that members had indulged jn an unchivalrous reference to the rtatements of members’ wives. MR LANG’S CAMPAIGN. BRISBANE, May 7. A request made on behalf of Premier Lang, by Mr J. S. Garden,. • and Mr Martin, for permission to hold a public meeting in the Brisbane Town Hall, had been refused by the authorities. The application will be renewed, when the new City Council takes office next week.