POSITION IN AUSTRALIA

Otago Daily Times, Issue 21300, 2 April 1931, Page 11

POSITION IN AUSTRALIA

MEETING OBLIGATIONS THE PAYMENT OF INTEREST ARRANGEMENTS WITH BANK (United Press Association.) (By Electric Telegraph—Copyright.) CANBERRA, April 1. Mr Scullin announced that, in accordance with the Commonwealth Government’s decision, arrangements had been made with the Commonwealth Bank to pay the interest due by the Lang Government to the British bondholders. THE EXCHANGE PROBLEM. LONDON CIRCLES CONCERNED, LONDON, iMarch 31. Wiiile the Australian bank is understood to hold sufficient sterling in London to meet Australia’s immediate obligations, concern is steadily 1 growing in consequence of operations outside the Exchange pool. Many Australian .exporters, desirous of obtaining sterling, are ignoring the banks and entering into direct agreements, with jjnglish merchants. ■. Financial circles are alsp most concerned for the New Zealand exchange. Many Australians are obtaining New Zealand notes and changing them for sterling, thereby depleting the New Zealand balances in London. The authorities express the opinion that if this practice continues the New -Zealand exchange will go the way of Australian and decline. A drastic system of export licenses, they consider, is the only solution of the exchange problem. THE REPUDIATION POLICY. FAR-REACHING EFFECTS, SYDNEY,; April 1. (Received April 1, at Q p.m.) Speaking at an official luncheon at the Royal Show, Sydney, to-day the Prime Minister (Mr J. H. Scullin) said: “If we dishonoured our bond we would not only dishonour our nation) but would also destroy our market. Our national loss would be greater, and pur poverty and misery would increase.” He added that it was not too much to claim that “ our method of redressing the trade balance has saved Australia from bankruptcy.” , , Mr Scullin raised a smile when he said: “ On top of the financial chaos we have had passed to us by Sta’te Governments still further financial obligations.” He declared that he was more than pleased with the increase in wool prices, and he assured the gathering that the Government would do its level best to restore prosperity and find new markets for their produce. Mr Lang, who was among ‘the speakers, said that the New South Wales Government had decided that the quickest way of giving relief to the primary producers was by arbitarily reducing the interest burden. The producers were entitled to a larger portion of the credit which their labours created, and cheap money was the, only solution of their difficulties. The Government could have obtained £700,000 for British bondholders on April 1, but it would have meant that that amount of credit would have been withdrawn from the primary and (secondary industries of New South Wales. “ Default faced the Government on either hand,” said Mr Lang, “and we decided that, the,, default should not he. to our own citizens.” V