DRAIN ON GOLD RESERVE

Taranaki Daily News, 30 April 1931, Page 7

DRAIN ON GOLD RESERVE

AUSTRALIAN SHIPMENTS

MEASURE PASSES THE HOUSE SENATE STILL TO DECIDE DEFEAT OF THE LANG GROUP By Telegraph.—Press Association. Canberra, April 29. The committee stages of the Commonwealth Bank Amendment Bill, which authorises the shipment of gold to London to meet urgent obligations, were completed ©id the third reading was carried on the voices. It is expected that the Bill will be submitted to the Senate during the week. The Lang group urged an unlimited note issue, but the Opposition forces combined with the Government in defeating an amendment to this effect.by 49 votes to 3. Yesterday Mr. Scullin appealed to the Opposition for co-operation in surmounting the present crisis. He said the Government would be prepared rto abandon the fiduciary issue or any other plank of its policy if the Opposition could show a better way out of the national difficulties. He claimed that the <rold in the bank in Australia was earnincr nothing. It would save interest and heavy exchange if Parliament would agree to the shipment ot £5.000,000 in gold. Mr. J. G. Latham replied that the removal of the gold reserve would inflict permanent financial disabilities. The remedy was a radical reconstruction of the national economic and financial fabric.

IF NEW SOUTH WALES DEFAULTS. BURDEN FOR COMMONWEALTH. Rec. 10.30 p.m. Canberra. April 29. The net obligation upon the Commonwealth should the New Wales Government continue to default to British and American bond-holders is £2.249,000 to June 30 next, iu addition to heavy exchange. THOROUGHLY UNDESIRABLE. WEAKENING OF WANING CREDIT. Rec. 8.55 p.m. London, April 29. Australia is again figuring prominently in the Press in connection with the proposed gold shipment and the news of another New South Wales default. The Financial Ne\Vs Says:. “London banking circles are of the opinion that Mr. Scullin’s proposal about the gold shipment is thoroughly undesirable. The abolition of the gold backing would do further damage to. Australia’s waning credit and be a serious obstacle to the restoration of confidence. It would ’"emove the last vestiges of the gold standard and make a return to the system extremely difficult. “If it is true the only alternative is a default, the use of the gold reserve may be the lesser evil. After all the gold reserve is primarily accumulated for use in emergency, but the possibility of arranging for the funding or the replacement of maturing Treasury bills seems at present remote. The Senate therefore may find it necessary f, pass the Bill unless the Commonwealth Bank again finds the money.” COMMONWEALTH BONDS DECLINE. FURTHER FALL ON THE EXCHANGE Rec. 12.20 a.m. Melbourne, April 29. On the Stock Exchange at Melbourne Commonwealth securities all declined to-day by from 2s 6d to 27s Cd, due to the announcement of New South Wales’ further default and the lack of confidence in the Federal Government’s financial policy. EXTENSION OF CREDITS ABROAD. THEODORE’S ONLY SOLUTION. Rec.. 12.20 a.m. Melbourne, April 29. Speaking at Ballarat, the Federal Treasurer, Mr. E. G. Theodore, held out no hope of Australia’s riieeting her overseas obligations except by an increase in commodity prices or an extension of long-term credits abroad. “We cannot carry on without these conditions, he said. “There has been coolness overseas towards Australia for a long time, there is no reason why our five per cent, loan is quoted at £7O, while New Zealand stock is at £9B and South African at £lOO. This must be due to a series of misunderstandings, and the blame cannot be all with the one party. We must cease our rancorous fighting and try to brush these misunderstandings away.