HONOURING OBLIGATIONS

New Zealand Herald, Volume LXVIII, Issue 20924, 14 July 1931, Page 6

HONOURING OBLIGATIONS

£5,000,000 FROM AUSTRALIA; \' MANY LITTLE WHITE BOXES, NO NEED FOR ARMED GUARD. [from our own correspondent.] SIDNEY, July 2. Under the authority of the Act recently • passed by the Federal Parliament, r £5,000,000 iri gold was shipped from Sydney for London this week to pay Austraiian Treasury bills discounted on the London market and due on June 30. Pending the arrival of the gold in London the bills will be taken up by the Commonwealth Bank, assisted by the various Anstralian trading banks. As the gold reaches London it will be used to replace , the funds of the banks. The shipment of the gold was the only way in >vhich Australia could escape default. The shipment will not have any immediate effect on the high rate of exchange between Australia and London, but it is expected to do a great deal to restore confidence.

In a statement this week the chairman of the Commonwealth Bank, Sir Robert Gibson, said :—" It may be of interest to call attention to the way in which unfunded Australian debts in London have been dealt with since the Premiers' Conference in Melbourne last August. At that time a total of £18,000,000 was owing to other than Australian banks. A sura of £8,000,000 of this was owing to a London bank, and £10,000,000 short-dated Treasury bills had been discounted on the London market. The amount owing to the London bank has since been reduced to £5,000,000. Treasury bills amounting to £5,000,000 were paid off by the Commonwealth Bank in March last, and with the payment on June 30 the total owing to other than Australian banks will then be reduced to £5,000,000, as compared with £18,000,000 owing last August. " This readjustment has been accomplished during a period of acute, financial stress throughout the world, and during , a period when the collapse in the price of raw material.? had greatly reduced the value of Australian products. It has, moreover, been carried out during this difficult period without recourse to assistance from other than Australian banks."

When millions in gold com passed through the streets of Sydney on Tuesday last on their way from the bank to the wharf nobody took the slightest notice. The coin, placed in numerous small boxes,. was loaded on to a motor-lorry, and there was nothing to indicate the value of the cargo.. There were neat steel bands about the little white boxes, and on each there was a big red seal. It was noticeable that ths wharf labourers treated these boxes * with a iittle more reverence th&n usual* ; but there was no fuss, no armed guard, no scowling at onlookers. It was a tribute to the respect for the law in Australia.