The Gisborne Times PUBLISHED DAILY. WEDNESDAY, FEB, 25, 1931. MOST HARMFUL POLICY

Gisborne Times, Volume LXXII, Issue 11449, 25 February 1931, Page 4

The Gisborne Times PUBLISHED DAILY. WEDNESDAY, FEB, 25, 1931. MOST HARMFUL POLICY

g Tho contest for the East Sydney „ w>y-olcctiou- is likely to prove memoru able in tho political history of Ausf trul'ia. It a' ill not make any material difference to tho Lang Government . whether its candidate) is elected or defeated. If thy Government’a uomguld b 0 returned, Mr Lang course, regard tho result as moral victory for his outpolicy of. repudiation 1 Tho intake is, unquestionably, the mentous that has ever been efore the electors of a con- ' stituenev in any overseas British Dominion. What it amounts to is approval or disapproval of tho wretched principle that a State shall be at liberty 'to break tho terms of a contract made with bond-holders if it finds it inconvenient to honor its proiniso to the full extent agreed' upon. Assuredly, tho shocking example which Mr Lang and his colleagues aro so anxious to place beforo the peoplo is one which attacks, at its very roots, tho principle of honesty in business. If a State Government is prepared to repudiate the terms on which * it has borrowed money from outsiders, tho unscrupulous amongst its pe.ople would, no doubt, also not hesitate: about. adopting • a similar unjust lin'o of policy. It is True that Mu Lang does not say that his Government refuses to acknowledge the debts owing by New South Wales. What ho ddes say, however, is that his Government will not pay outsiders interest above throo per cent., no matter what rate may have been agreed upon. In short, ho places a pistol at the heads of the State’s creditors and dictates that' ’ they can take what hi's Government is prepared to offer or suffer tho loss of tlio whole of • what is duo to them in the way of interest. One can readily imagine what attitude' any' court of law would take, up if a private debtor were to adopt a similar attitude towards"a private creditor! Mr Lang is fully aware of tho fact that private bond-holders abroad would be put to a lot of trouble in any attempt to secure their just duos,.seeing that their security is in another country. As far'as wo.caii remember there has been'only-one instance in this Do-' minion where default .was ever 1 made JjQ ' bond-holders at Home--and tljat was in), tlie ease of a harbor board in the. South Island,'"whicdi entercd upon a.-yehturq that • was- not 'fully; justified. aTho Government of: this. country, however,-took up-the liiatier and suitable legislation .was passed' dealing witlf tlie board’s assets and revenues anti an amicable' arrangement Was ultimately' reached. .. As : far as New South Wales is concerned, tlio position is quite ‘ simple: it has been freely; assisted'.withloans at tho •bgst fa,tos wdiqn' tbq issues wef e ; placed ou“ the market . and it has expended the. moneys.' Now, under the Lang Government’s ‘rule, it ; is not;, prepared to;'cub down its ox- , pendituro so that it may, continue, to : pay its-way. : If it, does, go to the ex- : treme'i which it. threatens, not only j will - tho ■ Commonwealth' Government ■ and the other State Governmentsbe prejudiced,! as< well as New South : Wales," o"im the , London money- market, but oven .this Dominion' may find i Home-iaivostors' shy.; further, monetary ; "Lolp. ’ We, are quite : certain fthat tho; Homo bond-holders" ;j would-bo prepared to'; meet: any ; Over- i seas' Dominion which ! bad ’the mis- < fortune !.£oi ba _ overtaken: bjj.. ft -tUre- j

economic calamity, but—and, rightly sq—what would be insisted upon would’ bo* ’ that' that jp'oxninio'n. should first of ~SU "pi aCo 2 its own,' affairs in P r WOF ordof; 7; ,i l - ;• <r _