AUSTRALIA'S CRISIS.

New Zealand Herald, Volume LXVII, Issue 20716, 8 November 1930, Page 11

AUSTRALIA'S CRISIS.

LABOUR DIVIDED. DISPUTE ACOUT FINANCE. I ' « MB. LYONS OVERRULED. DESIGNATIONS POSSIBLE (Ul'liOAlt IN TIIE CAUCUS. By Telegraph—Press Association—Copyright. (Received November 7, 10.13 p.m.) SYDNEY. Nov. 7. Tho Sydney Morning Herald says a split is likely in tho Federal Labour Party. The acting-Treasurer, Mr. J. A. Lyons, after being overruled in the Caucus on financial matters, said ho would have to consider his position and probably resign. The caucus desired to compel the Commonwealth Bank to finance maturing loans/and refused to sanction the raising of a loan in the open market. The acting-Primo Minister, Mr. J. E. Fenton, and tho ex-Treasurer, Mr. E. G. Theodore, supported Mr. Lyons. After tho caucus had outvoted Messrs. Fenton and Lyons, the acting-Treasurer said he would communicate with the Prime Minister, Mr. .7. H. Scullin.

Mr. Lyons absented himself from the evening sitting of Parliament. Mr. .Venton telephoned to Mr. Scullin in London lato Inst night. Unless Mr. Lyons alters his intention, fays the Herald, his resignation is certain. Plan to Make Bondholders Walt. Correspondents at Canberra state that ilie differences in the caucus arose over tho necessity of raising £27,000,000 to meet loans maturing in December. Mr. Lyons proposed to raiso a loan of that amount in about a month to cover tho Indebtedness. Tho section of the party which opposes borrowing succeeded in defeating that proposal and in carrying a motion demand, ing the immediate passage of legislation to compel tho 1 bondholders in tho loans totalling £27,000,000 to hold their" bonds for a further period of 12 months, the interest to bo paid as usual with tho proviso tfiat necessitous persons might receive immediate payment of small amounts from the Commonwealth Bank, which then would/ hold thoso cashed bonds as non-interext-bearing securities.

Tho sponsors of the motion stated that the object was to avoid repudiation of the Commonwealth debt, to stop tho traditional method of borrowing ana lo attest the extent to which tho resources of tho Commonwealth Bank could bo Utilised to meet national needs. Political Oblivion Visualised. Mr. Lyons told the caucus Sir Robert Gibson, chairman of directors of the Commonwealth Bank, had refused to listen to the proposal made to the caucus last week by Mi'. G. A. Gibbons that tho bank should underwrite tho maturing loans. This statement caused uproar, members demanding to know why Sir Robert —a servant of tho people—should be permitted to act as a dictator. Mr. Lyons declared that tho policy proposed by the caucus could cnlv lead to political oblivion. Mr. ; F. Anstey, the mover of the motion, is mentioned as probable Treasurer if . Mr. L yon 1: resigns. A message from Melbourne says Mr. * Lyons was interviewed there on his way to his home in Tasmania. He said: "I have not resigned. However, if our party insists that, its ridiculous proposals shall be submitted to Parliament as part of the Government's financial policy, then there will bo no placo for me in tho Cabinet." Mr. Lyons expects to receive a cablegram from Mr. Scullin about tho Cabinet Crisis when he reaches his home.