FINANCIAL CRISIS IN AUSTRALIA.

Timaru Herald, Volume CXXV, Issue 18512, 8 March 1930, Page 17 (Supplement)

FINANCIAL CRISIS IN AUSTRALIA.

Restriction Of Credit

OVERSEA TRAVEL AFFECTED. (United Press Association—By Electrlo Telegraph—Copyright.) SYDNEY, March 7. It is now practically impossible for Australians to take holiday trips abroad. This amazing state of affairs is due to the high rate of the London exchange and the decision of the Commonwealth Bank to prohibit the cashing of Commonwealth notes overseas. The difficulty has arisen by reason of Australia’s reduced exports of primary products, which are realised on in London and provide our oversea balances. These become depleted, and the adverse balance has been increased by the heavier imports. Moreover, a substantial increase in the official rates is likely in the near future.

CONCERN IN LONDON. MENTIONED IN HOUSE OF COMMONS. vUnlted Press Association—By Electric Telegraph—Copyright.) (Received March 7th, 8.30 p.m.) LONDON, March 6. In the House of Commons, Mr Glynn asked Mr W. Lunn (Under-Sec-retary for the Colonies), whether he was aware of the position created in Australia, as it affected British and other shipping, and the free movement of British subjects domiciled in the United Kingdom, not resident in Australia, by reason of the restriction of normal movements of credit facilities by the Australian Government, also the banks. . Mr Lunn said he understood that some difficulties had been experienced in commercial and shipping circles, in consequence of the restriction of credit facilities, by certain Australian banks, but as he was at present advised, the matter did not appear to be one about which representations could suitably be made to the Australian Government.

NEW BANKING POLICY. OPPOSITION TO MR THEODORE’S PROPOSALS. (United Press Association—By Electrle Telegraph—Copyright.) (Received March 7, 10.55 p.m.) SYDNEY, March 7. More details of Mr Theodore's proposal to enlarge the scope of the Commonwealth Bank disclose that the object is to divide the bank, one to be a Central Reserve Bank, and the other a trading bank, which would come directly into competition with the trading banks. The idea is likely to encounter severe opposition. Even members of Mr Theodore’s party are not wholly in sympathy. They believe a better substitute would be to increase the note issue.

Following a caucus meeting of the Australian Labour Party, it was stated that there was no likelihood of further increases in direct taxation. Nevertheless important amendments to the general taxation laws were foreshadowed. Further tariff duties are also contemplated. Another taxation proposal that the Government confirmed was an additional petrol tax of 2hd a gallon.