AUSTRALIAN FINANCE

Otago Daily Times, Issue 21255, 9 February 1931, Page 6

AUSTRALIAN FINANCE

THE CANBERRA CONFERENCE. BASIS OF THREE-YEAR PLAN. REDUCTION IN EXPENDITURE. (United Press Association.) (By, Blectrlo Telegraph—Copyright.) CANBERRA, February 8. ' (Received Feb. 8, at 5.5 p.m.) A reduction by £15,000,000 a year in Government expenditure is the basis of the three-year plan which was drawn up by a committee of experts to restore Australian prosperity. “ The alternative,’’ the experts say, “ is default in the Governments payments, the evils of which .would be immeasurably greater than the hardship which the nation would be asked to face.” The danger of inflation is strongly condemned. “ This is not the road to recovery, but to collapse, A reduction of interest rates by the savings banks is also a possible means of bringing about a fall in interest charges. Pensions of all kinds should be revised and made the subject of a close examination. A curtailment of road expenditure is Imperative, employment must be made profitable, and all obstacles to reduced, costs must be removed.” MR THEODORE’S POLICY. REDUCED INTEREST RATES. CANBERRA, February 8. (Received Feb. 8, at 5.5 p.m.) , Mr Theodore explained his long-awaited financial policy at the Premiers’ Conference. Advocating restoration of the 1929 currency levels and claiming that the adoption of this plan would increase the national income by about £100,000,000, he expressed the opinion that this would provide work for between 100,000 and 200,000 persons and would cause an additional production of material wealth amounting to £30,000,000. He emphasised that a reduction in the interest rates, which would be the effect of his policy, was the logical way of escaping from a burden which was becoming more and more onerous every week. There would be no repudiation of obligations, but there would be equality of sacrifice. “ We all realise,” continued Mr Theodore, “That there is a possibility of a collapse and a public panic, and a final crash, if not a social upheaval of a very serious character.” Mr M‘Phee (Premier of Tasmania) ; The crisis is here now. Mr Theodore: I admit that, but the final crash has not yet arrived, and to stave it off we have to devise some scheme of readjustment. Anyone who has studied the capacity of the banking organisations to give credit to industry will admit that they can expand their credit at will; they are limited only by the effect in carrying out such a policy. The banks raised the enormous sum of £283,000,000. in Australia for military operations during the war. I say advisedly that the banks have the power to create additional credit. My suggestion is merely the restoration of the value of our currency to what it was, say, two years ago, which does not mean inflation, bat which would enable us to turn the corner towards rehabilition. The Sunday Press points out that by his speech Mr Theodore has enhanced his reputation as a mystery man, for while hinting at a reduction of- interest rates he failed specifically to state how he would carry out his policy, _ leaving the Premiers wondering whether it was tantamount to inflation. The conference adjourned till Monday. ASSISTANCE FOR FARMERS. COUNCIL APPROVES OF LOAN. CANBERRA, February 8. (Received Feb. 8, at 5.5 p.m.) The Loan Council has approved of the immediate raising of a loan of £6,000,000 to aid the wheat growers. Of this sum £3,500,000 will be applied to a bounty of 6d a bushel on wheat exported during the 1930-31 season, and the balance of £2,500,000 will be available to the States to help necessitous farmers. EARLIER MESSAGES. DELEGATES NOT HOPEFUL. CANBERRA, February 7. The State representatives at the Financial Conference described the whole proceedings as futile, and serious doubts were expressed whether anything would be achieved by the conference. There is strong criticism of the manner in which the conference is being conducted. It is stated that there was not even an agenda paper, and that the Ministers had nothing definite placed before them for discussion. Relating to the proposed three years plan, Mr Lang stated: “So far I have not heard a word about the plan, and I have come to the conclusion that the Government has no plan.” / NO DECISIONS REACHED. CANBERRA, February 7. The delegations expressed doubt about the success of the conference, which is described as futile. No decisions were reached, and the conference adjourned till to-morrow. GENERAL STRIKE PROPOSAL. AN OVERWHELMING DEFEAT. MELBOURNE, February 7. When the Trades Hall Council met, a proposal to organise for a general strike was overwhelmingly defeated. A union official, who has held office for 42 years, described the Sydney Trades Hall proposal for a general strike against the basic wage reduction as the most ridiculous suggestion ever made in the Labour movement in view of the circumstances. AUSTRALIAN STOCKS. UNCHANGED IN LONDON. LONDON, February 7; (Received Feb. 8, at 8 p.m.) The Morning Post’s financial editor states: “Australian stocks are unchanged, despite the favourable trade balance figures. Later came news from the conference at Canberra. It would be unwise to jump to conclusions from the cabled summary, but it almost seems as if Mr Seullin has joined the Labour Extremists in scouting the bankers’ advice. The news of the breakdown of the conference and the implication of a possible collision between the Commonwealth and State Governments and the Arbitration Court do not have a reassuring effect on English investors.”