FACTS MUST BE FACED.

Timaru Herald, Volume CXXV, Issue 18653, 23 August 1930, Page 17

FACTS MUST BE FACED.

Australia’s Financial Crisis

SIR OTTO NIEMEYER’S REVIEW. United Press Association—By Electric Tel egr aph—Copyright MELBOURNE, August 22. Sir Otto Nlemeyer, addressing the Conference of State Premiers and Treasurers, reviewed the financial and economic position of Australia. His address made a great impression on members. In submitting his review of Australia’s position, Sir Otto Niemeyer said Australia is off the Budget equilibrium, off the exchange equilibrium, and is faced by considerable unfunded and maturing debts, both internal and external, in addition to which she has on her hands a very large programme of loan works, for which no financial provision has been made. The only alleviation of the gloomy picture is that, apart from £36,000,00 of unfunded debt, Australia by a great piece of luck has no external maturities in 1930 and 1931. That means, in effect, that she has a maximum period of two years in which to put her house in order. Australia’s credit is at low ebb on a 6 per cent, basis in Australia itself, and rather more abroad, and is in fact lower than any of the I ’inions not excluding India, and even lower than some protectorates. It is certain that the rate of increase of output per capita in other countries during recent years has been much greater than in Australia. Sir Otto Niemeyer continued that Australia could not wish to remain for ever under the regime of emergency tariffs and a rationed exchange. She must emerge from that position, and show signs of progress towards an emergency. Australian standards had been pushed too high relatively to Australian productivity, and to the general world conditions. If Australia did not face that issue, she would not be able to keep even those standards which she might hope of carrying by taking timely action. The difficulty, he concluded, w r as not beyond control, but demanded considered progress and united action, and had to be squarely faced.

ALL AUSTRALIA STIRRED. ACCEPTING THE INEVITABLE. United Press Association—By Electrlo Telegraph—Copyright (Received August 22, 9.20 p.m.) SYDNEY, August 22. Australia is stirred and deeply concerned by Sir Otto Niemeyer’s report, together with the drastic decisions at the Premier’s Conference and the Loan Council. The whole subject is on everybody’s lips. A majority of people are resigning themselves to the inevitable. The “Evening News” says that the great boom of borrow and bust debauch has ended. The bill is presented, and we 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 and attempts will be made to eliminate duplication of Commonwealth and State services. The Standing Committee appointed at the Melbourne Conference is to watch 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 overdrafts made solely on security of stocks and shares, which policy has contributed in no small measure to the continued heavy selling pressure on ’Change in the past few weeks. Commonwealth bonds, however, are holding their own.

PRIME MINISTER INDISPOSED. SLIGHT PLEURISY OF LUNG. United Press Association—By Electric Telegraph—Copyright (Received August 22, 7.50 p.m.) SYDNEY, August 22. The Prime Minister (Mr J. H. Scullin), while en route for Fremantle, where he is to join the liner for London, developed slight pleurisy of the left lung, and will remain in bed for the remainder of the trans-Con-tinental journey. Mr Scullin’s condition is causing his friends anxiety. The great strain of his work has taken a heavy toll of his strength.

ENGLISH PRESS OPINIONS. ORGY OF EXTRAVAGANCE. United Press Association—By Electric Telegraph—Copyright (Received August 22, 7.20 p.m.) LONDON, August 22. Australian affairs figure prominently in the Press. The “Daily Telegraph” says that there is no member of the whole British Commonwealth of Nations, which would not feel that their pride had been lowered if Australia fell short of the highest standard of meeting her 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 inevitable reactions upon wages and the standards of living and economies in departments. The “Morning Post” says that the crisis is nothing more nor less than a nemesis on an orgy of extravagance. The position in Australia should provide a grim warning to the British Go-

vernment of the fate of countries which refuse to cut their coat according to the cloth. The “News Chronicle” says that the execution of the Melbourne conference decisions will need nerve and courage. The “Times” says that 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. It certainly appears that he lias succeeded in his object.

ENORMOUS OBLIGATIONS. WHAT COMMONWEALTH HAS TO MEET. (Received August 22, 10.35 p.m.) SYDNEY, August 22. Between now and the end of 1934, 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 will mature.