FEDERAL CRISIS

Gisborne Times, Volume LXXII, Issue 11452, 28 February 1931, Page 5

FEDERAL CRISIS

CURRENCY EXPANSION WITHOUT INFLATION 1 . t— ' IMPORTANT DISCOVERY CU.P.A by Flee- Tel. Copyright) LONDON,' Feb. 2G. Mir J. Tayloi* Peddle, the wellknown economist and money reformer, author of a book entitled “A Dual System of Stabilisation' 5 has made an important discovery in the science of money, particulars of which have been forwarded to the Australian Government. ' He claims that his system permits an expansion of currency to take place without inflation, and also, eliminates deflation from the currency system. In other words, it stabilises all. implications of the quantity theory of money. It is an improvement on th 0 Federal reserve system, eliminating all the defects therein which were disclosed during the last Stock Exchange boom in America. •Interviewed regarding the Australian Loan Council’s decision to inflate the fiduciary issue, Mr Peddle said lie greatly regretted such action, which was quite unnecessary. He was in sympathy with' the objectives of money reformers in Australia, but strongly disapproved their proposals considering that the suggested cure would lead to irreparable disaster and loss of credit. Australia’s first aim should be to restore the. currency parity and then set about the reform of its central banking practice. The Loan Council’s proposals should be deferred for four months, when the British .Government committee’s report on finance and industry would he available. TRADE BALANCE. IMPROVING SEVEN MONTHS’ FIGURES. CANBERRA, Feb. 27. Australian exports for the seven months ended January 31 were valued at £55,950,000, and imports at £48,421,000, leaving' a favorable trade balance of £7,000,000 compared with an adverse balance of over (£30,000,00 in the previous corresponding period. BRITAIN SYMPATHETIC ANTI-AUSTRALIAN PROPAGANDA DEPLORED LONDON, Feb. 26. Lord Stanley', in the capacity of president of the British Australian Society, has sent a letter to the press expressing surprise that a representative of the people of Australia should accuse the British press of insidious anti-Australian propaganda. He declares that to injure Australian credit would be insane. It is unwise for a representative of Australians to stir up hostility in England, for on the support of Eigland largely depends the restoration of Australian credit, News and comment in relation to Australia are sympathetic towards her difficulty, and are inspired .by a desire to assist her in her difficulties. ROOT OF THE DISORDER MOULD BE UNTOUCHED BY FIDUCIARY ISSUE (Received Feb. 27. 10.20 p,m.) LONDON, Fe. 27. The Financial News points out that an increase in the fiduciary issue without regard to a sound economicpolicy can only intensify Australia s troubles. The root of the disorder will remain just because essential reforms are being imperfectly carried out and, while it remains, one dose, of currency inflation will merely excite a craving fop another, THEODORE’S NEW PLAN COMES BACK TO INFLATION! SYDNEY, Feb. 27. Mr Theodore, the. Federal Treasurer, returned to Sydney from Melbourne to-day. He met a number ot his supporters in conference on the • subject of the financial outlook and the recent political developments. It is understood that he told them that he was sanguine the Senate would agree to fiduciary note issue of £lB,000,000. . . . Financiers are not favorably impressed with Mr Theodore’s latest proposals for ‘‘raising the wind.” His so-called fiduciary notes issue is being denounced as equally impracticable as his earlier schemes. A. leading banker said the whole thing came back to inflation and the result .would be to force prices Upwards. It would be necessary for the fiduciary portion of the note issue to be hacked •by securities of some kind. Government securities at- the present time were at a considerable discount in th market. The proportion of gold backing had been lowered from 52- per cent, in June 1929 to 8 per cent, to-day by shipments of gold to London and no sane financier would recommend that the process of Inflation b e carried further. LANG'S POLICY " ! ONLY TWO COURSES OF ACTION ' POSSIBLE "SYDNEY, Fob. 27. Premier Lang to-dav accused the Commonwealth and other States of repudiating the amounts which' the New Sotith Wales Government had 1 spent on their behalf. ’He said the chief item in the account for £737,.733 which his Government submitted to the Commonwealth was £305,216. which Now South Wales had paid out. in the redemption of closer settlement debentures. This item was purely a Roan Council debt and'that ;body had now repudiated it. 4 ; Air Lang further .said': — t “Two courses are. open to Ausi tralia; One is to. adopt the New . South Wales Labor plan, informing our creditors of our inability t-o j pay and'making an honorable settlement with them and the other is toi drift along. shouting ‘We can and'will' pay our' debts’, knowing that we could not until the inevit- ' able - ‘Black Thursday’ . arrived, when ' hot only ‘ the iJmfcipiftl and interest will have to'he repudiated ; hut when finAhce’ for brdihafy. gov> ernttieht services will not he avail- •. able.” . ■ ■< . ... POSITION AS TO FIDUCIARY • , .-ISSUE. , "■• ■ G IU.P-4 by Elec. Tel. Copyright! :. " CANBERRA, Feb, 27. The Federal Government intends that tho Fiduciary , note' issue shall ■bo .'of distinctive and that the promise to pay in gold' on demaiul j which appears on all Commonwealth' 'noths. shall be-omitted. The Governt ment intends to introduce., a special kr.easure authorising ■ the . Common- • wealth - bank to make the;, issue. * ' •" V ’ V ' ‘ • j"." -1; ■ .