A PRECARIOUS SITUATION

Nelson Evening Mail, Volume LXVI, 15 February 1933, Page 7

A PRECARIOUS SITUATION

COMMENT BY PROFESSOR COPLAND There have been numerous references to the fact that Australia has optional conversion rights in respect of loans amounting to about £3,000,000 domiciled in London. Discussing the question recently Professor D. B. Copland expressed the opinion that there is a powerful case for immediate action in the interests of London as well as of Australia. “It may be doubted whether we in Australia, let alone London authorities, realise how urgent the problem may become,” he wrote. “Australian credit stands at a higher level than at any time in the past four years. The demonstration of good faith on her part compares very favourably with the ell'orts of many other countries, but we must be clear why we have been, able to meet our obligations. Partly as a result of our ell'orts we have been able to sustain export production, and even to increase it substantially. At present it is estimated that the volume of our exports will be from 25 to 30 per cent higher this year than before the depression. This result is in part caused by the splendid seasons we have experienced in the past two years. Yet we are at present importing more than we can afford from our current balance of payments. We may be down on the current international accounts by £4,000,000 to £8,000,000 for the year. What will the position be in a bad season? Clearly, adverse weather conditions would quickly reduce our income from exports by 20 per cent leaving us with only £04,000,000. Out of this sum it woyld be difficult, if not impossible, to pay for necessary imports and maintain the external debt j service. .. . A bad season would jyeaken our credit in London and render a successful conversion loan impossible, even with the support of the high finanicial institutions.”