NATIONAL FINANCES

Poverty Bay Herald, Volume LXII, Issue 18634, 19 February 1935, Page 7

NATIONAL FINANCES

AUSTRALIAN PROBLEMS SHORT-TERM DEBT EXCHANGE ON LONDON (Par Press Association.) WELLINGTON, this day. Interviewed on his return after a year in Sydney as economic adviser to the Bank of New South Wales, Professor A. G. B. Fisher, of the chair ol economics, Otago University, said that there had been a big controversy in Australia regarding the wisdom of increasing or diminishing tho volume of short-term debt, held for the most part by banks. While influential sections of opinion held that an increased volume was essential to facilitate the easy credit conditions which were believed to be necessary for recovery, others insisted that the maintenance of the floating debt at the present high level might make it difficult to avoid inflation of a dangerous kind. The more immediate danger might easily be that of exercising excessive caution at a time when the business world as a whole was still rather timid. The actual decision regarding the policy rested mainly with the Loans Council and Commonwealth Bank. The latter had made it clear during the last year that further Treasury bill issues would he made available only on condition, that an equivalent amount of short-term debt was converted into long-term debt before the end of the financial year.

Questioned regarding the exchange, Australia on Loudon, Professor Fisher said that while there had been some pressure recently for further depreciation, especially on account of the chronic difficulties of wheat farmers, it seemed likely that a stable exchange rate could be predicted for at least some time to come.