FACING CRISIS

Taranaki Daily News, 23 August 1930, Page 9

FACING CRISIS

AUSTRALIANS STIRRED I r UNITED ACTION DEMANDED I .‘.‘CREDITS AT LOWEST EBB’’ I TWO YEARS FOR RECOVERY > By Telegraph—Press Assn. — Copyright. Melbourne, Aug. 22. Sir Otto Niemeyer, addressing, the conference of State Premiers and Treasurers, reviewed the financial economic position of Australia. His address made a great impression on the members. In submitting a review of Australia’s position, Sir Otto said: “Australia is off the Budget equilibrium and off the exchange equilibrium and. is faced by considerable unfunded and maturing debts, both internal and external; in addition to which there is a very largo programme of loan works for which no tinancial provision has been made. “The only alleviation of the gloomy picture is that, apart from the £30,000,000 of unfunded debt,' Australia, oy a threat piece of luck, has no external maturities in 1930 and 1931, and that means in effect that the country has a maximum period of two years in which to put its house in oidei. “Australia’s credit is at a low ebb, on the 6 per cent, basis in Australia itself, and rather more abroad. Jt'4s, in fact, lower than that of any of the Dominions, not excluding India', and even lower than, that in some protectorates. It is certain that the rate of increase of output per capita in other countries in recent years is much greater than in Australia.” Sir Otto, continued that Australia could not wish to remain for ever under the regime of emergency tariffs and a rationed exchange. The nation must emerge from that position and show signs’ of progress -towards an emergency/ Australian standards of living had been pushed too high relatively to Australian productivity and to general world conditions. If Australia did not face that issue the people would not be able to keep even-those standard t they might hope to carry by taking timely action. . The difficulty, he concluded, was not beyond control, but demanded considered progress and united action and had to be squarely faced.

“THE BILL IS PRESENTED.”

SIR OTTO NIEMEYER’S “MEDICINE”

Rec. 9.20 p.m. Sydney, Aug. 22. Australia is stirred and deeply concerned by Sir Otto Niemeyer’s report, together with the drastic decisions at the Premiere’ conference and of the Loan Council. The subject is on everybody’s lips, the majority of the people resh'nino' themselves to the inevitable. The Evening News says: “The great boom borrow and bust debauch las " ended and the bill is presented. VVe have to meet it. Sir Otto Niemeyer has diagnosed the cause and prescribed. the medicine; we must ourselves administer the dose. The Loan Council has undertaken to raise no further loans overseas until after the existing oversea short term indebtedness has been completely dealt with. Attempts will be made to eliminate the duplication of Commonwealth and State services. The standing committee appointed at the Melbourne conference is to watch the operations of the common plan idea for the rehabilitation of Australian finance.” The acting Prime Minister, Mr. J. E. Fenton, announces that there is no intention at present of holding a special session of the Federal Parliament. ’ As a result of the slump on the Stock Exchange some Australian banks have already called up overdraft*, made eolely on the security of stocks and shares, which policy has contributed in no email measure to the continued heavy selling pressure on exchange in the past few weeks. Commonwealth bonds, however, are holding their own. Between now and the end of . 334 the Australian Governments have to cover internal and external obligations already existing, without reckoning for current financing throughout that period, of about £261,000,000, of which £39,000,000 represents floating charges. However, as Sir Otto Niemeyer points out, there are no maturities of significance in 1931, and the interval will afford a respite for the harassed Treasurers, but in 1932 external loans totalling £13,000,000 mature.

“GRIAI WARNING TO BRITAIN.”

COMMENT IN BRITISH PRESS.

Rec. 7.20 p.m. London, Aug. 22. Australian affairs figure prominently in the Press. The Daily Telegraph says; “There is no member of the whole British Commonwealth of nations which would .mt feel its pride lowered if Australia fell short of the highest standard in meeting its obligations. The conference of State Ministers was deeply impressed with Sir Otto’ Niemeyer’s statement that the pledges given should produce an immediate ameliorative effect on Australian credit. The real test will come when the drastic diminution of revenue has the inevitable reactions upon wages and standards of living and economies in the departments.” The Morning Post says: “The crisis is nothing more or less than a Nemesis on an orgy of extravagance. . The position in Australia should provide a grim warning to the British Government of the fate of countries which refuse to cut. their coat according to their cloth.”

The News-Chronicle says the execution of the Melbourne conference decisions will need nerve and courage. The Times says: “While the Australian cricketers are emerging brilliantly from the ordeal of the British climate their compatriots have made a successful start in a grimmer test on the home ground. Fortunately it is unnecessary to take the situation too tragically. ‘ Sir Otto Niemeyer rightly emphasised the dark side in order to convince the authorities of the necessity for drastic action. Certainly it appears he has succeeded in his object.”