NEW SOUTH WALES DEBTS

New Zealand Herald, Volume LXIX, Issue 21098, 4 February 1932, Page 9

NEW SOUTH WALES DEBTS

ISSUE OF A WEIT.

SEQUEL TO DEFAULT.

ACTION BY COMMONWEALTH

INTEREST DUE OVERSEAS

PAYMENT ARRANGED

B7 Telegraph—Press Association—Copyright. (Received February 3, 5.35 p.m.) MELBOURNE. Feb. 3.

The Commonwealth Crown Law officers to-day issued a writ against New Soulh Wales in respect of its default.

The Prime Minister. Mr. J. A. Lyons, earlier in the day had announced that the Government would issue a writ against New South Wales to recover £953.76>5 due for defaulted overseas interest. The Government " would take any other a.ction within its power to compel New South Wales to honour its obligations." Mr. Lyons announced this evening that while the Commonwealth Government admitted ultimate liability for the bondholders' unpaid interest the New South Wales Government must first provide the Commonwealth with the funds necessary to meet all liabilities on the public debt of that State.

The Commonwealth Government had arranged to pay the interest due to New South Wales bondholders direct, instead of to the Government of New South Wales.

Mr. Lang's moratorium proposals to London were not discussed by the Loan Council, but the general opinion among members was that he had no chance of achieving his object. Mr. Lyons described the proposal as " opposed to Australia s policy and plan of reconstruction." The Loan Council refused permission to Mr. Lang to issue £3,000,000 of New South Wales honds to finance a section of the Sydney city railway. STATUS OF LOANS. DEFAULT MAY ALTER. question of trustee list. (Received February 4, 1.5 LONDON, Feb. 3. Continued default may alter foe trustee status of the New South Wales loans, according to the Financial New*;. It is probable that the authorities will be requested to remove the loan concerned from the trustee list. The position would immediately arise whether the other New South W'ales. loans should not be removed at the same time. The London agents of the bondholders are taking legal advice regarding what should be done.

FEDEP.AL DECISION".

REQUEST TO THE BANKS.

FINANCE FOR REST OF YEAR.

(Received February 3, 5.45 p.m.) MELBOURNE. Feb. 3

The Commonwealth Government has decided to ask the banks to finance loan programmes for the remainder of the year, but- New South \\ ales share of the money will be retained to pay interest aggregating :£/.000.000 which will he due by the end of the year, on which Mr. Lang is likely to default.

ME. BRUCE ATTACKED.

UNEMPLOYMENT QUESTION

LANG'S BY-ELECTION SPEECH.

(Received February 4. 12.5 a.m.)

SYDNEY. Feb. 3. The Premier of New South Wales, Mr. Lang, speaking this evening in support of the candidature of Mr. Edward Ward for the East seat at the coming by-election, discussed the doings of the Loan Council. He violently attacked Mr 4 S. M. Bruce. Assistant Federal Treasurer, and declared that he was actually the leader of the Federal Government, not Mr. Lyons.

Mr. Lang asserted that Mr. Bruce, in all good faith, had urged throwing men out of employment, not at a rate, say, of 20,000 in one batch, but so many this month and so many next month, so as to get them accustomed to unemployment.

A more monstrous proposal had never been conceived by the leader of any Government, said Mr. Lang. Mr. Bruce s policy was that bondholders should bo paid their full interest, while thousands of people went hungry. It is reliably reported that Mr. Lang shortly will try to enter the Federal political sphere.

MORATORIUM SCHEME.

request to bondholders

AGENT-GENERAL'S ACTION.

LONDON, Feb. 2.

As soon as the Agent-General for New South Wales, Mr. A. C. Willis, received Mr. Lang's cablegram requesting him to negotiate with bondholders for one year s suspension of the interest due lajit- Monday he approached the Westminster Bank and the Chase National Bank, the respective agents of the British and American bondholders. Mr. Willis asked for the year's suspension here and in America. He stated afterwards that his request obviously implied a satisfactory settlement at the end of the year's moratorium, but the negotiations were only in the preliminary stage.

Mr. Willis said he had information which inclined him strongly to the belief that Mr. Lvons would be well advised, even at this late hour, to take a wider Australian outlook and iind a way out of the difficulties.