SHORT TERM DEBT

Hawke's Bay Tribune, Volume XXV, Issue 57, 19 February 1935, Page 4

SHORT TERM DEBT

Controversy in Australia INCREASING OR DIMINISHING (By Tele»raph-Pre>* Association.) WELLINGTON, Feb. 19. Interviewed on his return after a year in Sydney as economic adviter to the Bank of New South Wales, Professor A. G. B. Fisher, of the Chair of Economics at Otago University, said that there had been a big controversy in Australia regarding the wisdom ot increasing or diminishing the volume of the thort-terni debt held for the most part by the banks. While influential sections of opinion held that an increased volume was essential to facilitate easy credit conditions, believed to be necessary for recovery, others insisted that tho maintenance of the floating debt at the present high level might make it difficult to avoid inflation of a dangerous kind.

A more immediate danger might easily be that of exercising excessive caution at a time when the business world as a whole was etill rather timid. The actual decision regarding policy rested mainly with the Loans Council and Commonwealth Bank. The latter had mado it clear during the last year that further Treasury Bill issues would be made available only on condition that an equivalent amount ot the shortterm debt was converted into a longterm debt before the end of the financial year.

Questioned regarding exchange between Australia and London, Professor Fisher said that while there had been some pressure recently lor further depreciation, especially on account of the chronic difficulties of the wheat farmers, it seemed likely that a stable exchange rate could be predicted for at leaet some time to come.