The Daily News FRIDAY, JANUARY 16, 1931. SEEKING A REMEDY.

Taranaki Daily News, 16 January 1931, Page 6

The Daily News FRIDAY, JANUARY 16, 1931. SEEKING A REMEDY.

There is not much ground for optimism in regard to Australian finance, and as the repercussions of the difficulties there have a detrimental effect upon New Zealand trading, interest here in what might otherwise be considered a purely- domestic question for the Commonwealth is easily understood. While Australian politicians, divided into those who urge economies and thus the due payment of liabilities, and those who believe in liquidating debts by paper money, are indulging in debates that are more or less futile, the Loan Council, the body that is charged with the supervision of all loans raised by States and by the Commonwealth, has held a sitting. The Premiers and Treasurers of the States are members of the council, and as such are fully aware of the financial problems that face Australia. With a dwindling population, an enormous reduction in the value of exports, and heavy loan liabilities falling due within the next year or two, it Cannot be surprising that national credit has been lowered and that the nervousness of investors in Australian loans is manifested in the prices at which they are willing to sell their holdings. The Loan Council, as such, knows no polities, though its members are all politicians in office, and it is doubtless this fact that has led the-newly elected Labour Premier

of New South Wales, Mr. J. T. Lang, to decline to act as a member of the council. Whether his defiance of a Federal undertaking, as the Loan Council is, will be tolerated or is even constitutional is for Australia to settle. One British critic has gone so far as to say that if such action on the part of a Stale is permitted the disruption of federated Australia has begun. Mr. Lang’s reply to his critics is apparently that he was elected by a large,majority to carry out a policy involving much, loan expenditure, and if the Loan Council is in the way of such a policy’s success then he will have nothing to do with the council. As to the effect of his action upon the general credit of the Commonwealth he is not concerned. Unfortunately this breezy atmosphere of selfconfidence cannot be shared by those responsible for the rehabilitation of Australian finances. They have induced some of the States to practise economies in an effort to balance their yearly budgets, and it is no wonder they complain of the action of New South Wales, which expects the council to “back its bills,” but otherwise holds aloof. When the wealthiest and most powerful State in the Federation takes this attitude an already extremely difficult national situation is further complicated. It is not surprising that in such an extremity the Loan Council suggests that an expert committee be set up to recommend means fox- . bringing about an improvement. What is surprising and hopeful is that this gathering of politicians should decide that the suggested committee should be “not necessarily political.” Could national finance be divorced from politics no one doubts that with the magnificent potentialities ofi the Commonwealth recovery would be certain and fairly rapid. If Australia is really willing to accept the advice of financial experts there is more hope of an early recovery than seems possible when actions such as Mr. Lang’s are contemplated. All the same, however cordial may be the invitation to experts to give their services to the Loan Council for the benefit of their country, it will not be surprising if assurances are sought that, any advice given will be followed. Financial experts in any country are usually busy men of affairs and have no time to waste on efforts that are to be treated with disrespect, or.even contumely. In Australia they are not likely to have forgotten what happened when one of the foremost London financial experts gave advice to the Commonwealth at its own request. Though the members of the Loan Council in their capacity as Ministers I’ecognised the value of the advice and were prepared to accept it they were unable to obtain the support of their Parliaments, and. in one instance, in New South Wales, 'he electorate emphatically declined to believe the advice tendered was either disinterested or wise. Still the fact that after such an experience the Loan Council should suggest invoking the aid of nonpolitician is hopeful to Some extent, though it indicates also to what serious straits it finds itself reduced. Australia can, if she will, get back to a sound financial position. To do so will need sacrifices from all sections of the community. It will be still more necessary that political exigencies be absolutely subordinated to the national task of rehabilitation.