MR LANG’S SOLUTION

Hawera Star, Volume L, 10 February 1931, Page 5

MR LANG’S SOLUTION

FINANCIAL POLICY OUTLINED SPEECH CAUSES SENSATION “INFLATION UNASHAMED.” l lu» IM..U-UUU- uj r.„;tni,

Lopjr rigauj GAN BERRA, Feb. 9. His financial poncy was outnneu at 10-uay’s commence ox Brenners ami treasurers uy .ur. j. 1. Lang, x>o»v *outii Wales. It was: •That the Governments ol Australia deemed to pay no xurtner interest to uritish bonuholcters until Britain nas Meant with tne Australian oversea uebt .a tne same manner as it settled its own foreign debt with America. • That in Australia interest on ail Government borrowing be reduced to o j.er cent. "That immediate steps be taken by the Commonwealth Government to abandon the gold standard currency and set in place thereof a currency based upon tne wealth of Australia, to be termed the gold standard.” In explanation -Ur. Bang said: ‘The Government ox New Soutn Wales has decided, to adopt this 'policy where it plies 'regardless of what tne decision may be at this table and i am hopeful that aPI the States oi the Commonwealth will be able to say truly that at last the depression has luted. "It means there will be released ior t- f circulation in Australia millions ol *4 pounds which are now sent overseas. A isvmpathetio fall of interest throughout me commercial and financial life of the Commonwealth would give new life to industry and uo those tilings which the Prime Minister in his opening address said, were so necessary. "This, scheme if adopted, by giving new life to the Government and reviving industry will cause ready ahsoiytion of the unemployed. Confidence m Australia, will be restored because the Commonwealth’s dependence on the outside world will be reduced to a minimum.” Mr. Lang said silver currency v.ouicl suit Now bouth \Vales. This was che only currency that could not be debased. The abolition of the gold standard would not cause the nation to suffer in its international relations. “Having paid the producers of Australia with our currency, we could . iy the whole of our revenue from our 'sale of surplus products overseas to speedy amortisation of our exteinul debts', save only the amount necessary to establish credit for those goods which Australia is unable to 'produce. Unless also there was some method ol national handling of the wool clip, Mr. Lang concluded, the great financial houses would continue to grind this industry between the upper millstone ol usury and the, lower millstone ol financial speculation. The .speech CcHused ti sensation. tt» is understood that the Prime Minister and Mr. Theodore dissociated themselves from the Lang plank. Mr. T. K. Bavin, leader ol the .State Opposition, commenting on Mr Lang s speech, said.: “Mr. Lang is the Hist responsible public man in the British ■Dominions to propose open, flagrant reoudiation. , , ~ “I decline to believe that the majoi;tv of the Labour Party of this State would support the Premier m an act . of shameless, barefaced stealing, k Financiers in Sydney say Mr. theodo re’s fiancial scheme is unconviniing as it ignores the fundamental tacts, one of which is that Australia s P level is higher than the general level of prices throughout the world and the '■■an is growing wider. Another is that Australia cannot act independently of world movements in any attempt to correct its position. The “Daily Press” unreservedly condemns Mr. Theodore’s policy. lh<? “Sydney Morning Herald” likens Mr. '"’eodore to a master magician. The “Evening News” describes the policy as inflation naked and unashamed It mints out that the floating debts of Australian Governments m 1929. were £5 500.000 while now they are £so,uw.000. ’ -

MR THEODORE’S “PANACEA.’ CRITICISM AT HOME.

LONDON. Feb. 8. “Although full details of Mr E. C Theodore’s plan involving the restoration of the 1929 currency levels have 71 ot been revealed,” says “The Times,” “the general description gives the impression that it is the result, of confusion of ideas. The allegation that bondholders are getting 164 s instead of 100 s interest on 5 per cent stock is a misrepresentation of facts. Any manipulation of the prices level in Australia by a monetary policy or otherwise would not help the country. “The Australian pound is depreciated because it has been inflated. Australia has in effect deflated the currency. Depreciation can be cured by only drastic deflation helped by foreign borrowing. Meanwhile depreciation bv reducing the gold value of wages and other costs will slowly help to "establish a fresh equilibrium of r economic affairs in Australia.” “All those with Australian interests must bo filled with dismay at the news from Canberra.” says the “Financial News.” Mr Scullin, who onlv a few months ago agreed upon the' balancing of Budgets and reducing expenditure as cardinal points of reconstruction, has denied both: but it is at least something that Mr Theodore. uncovering his capricious financial light from under the Mungana bushelf has told the public definitely what to expect. A committee of experts lias warnerl the Govornmont that reconstruction is a painful process, but nothing painful can be accepted. Advance Australia along the primrose path!”