AUSTRALIAN LETTER.

Timaru Herald, Volume CXXXIII, Issue 18764, 31 December 1930, Page 4

AUSTRALIAN LETTER.

| INTERESTING NEWS AND COMMENTS. (From Our Own Correspondent). CANBERRA, December 16. Owing to the fall in world prices, the position of Australian wheat growers is extremely critical. Values are already far below the cost of production in Australia, and the plight of the farmers has been intensified by their own ready response to the appeal by the Commonl wealth Government to increase the acreage under wheat, in order to assist in reducing Australia’s adverse overseas trade balance. In consequence it is estimated that a record harvest will leave about 200,000,000 bushels available for export. Financing the sale of this season’s wheat has become a very serious problem. The Commonwealth Government first attacked the question I by requesting the directors of the Com--1 monwealth Bank, which is Government owned, though not under direct Government control, to advance 2/6 a bushel, f.0.b., to the growers. Owing to the seriousness of the general financial position which caused a great shrinkage of deposits, the Bank Board replied that it could not advance mare than 2/- a bushel f.o.b. Angered by this refusal the Labour caucus, whose inflation policy has consistenty been resisted by the Bank Board, forced the Government to bring in a Bill providing for a guarantee of 3/- a bushel, f.0.b., thus reversing all financial practice by fixing the advance at above the value of the commodity which is security for the advance. This Bill has passed both Houses of Parliament, and the Government is looking to the i the Bank Board to provide the money. ’ There is no money available from the : revenue for the purpose, and it is obviI ous that the only source from which ' the advance can be paid to the farmers is the Banks. It is apparent that the i real motive behind the Bill which proi Jesses to give relief to the farmers is the application of political pressure to the Bank Board to compel it to initiate inflation. Since the Bill became law, the Bank Board has increased its offer to 2/6 a bushel, f.0.b., but the Government intends to adhere to its determination to guarantee the wheat growers 3/- a bushel. Interest is now centred on the question whether the Board will be strong enough to maintain its attitude, or whether it will succumb to the pressure. The present position is an interesting sequel to the attempt made by the Government early in 1930 to create a compulsory wheat pool, which would handle and market the whole Australian crop. Under this proposal farmers were to be guaranteed the equivalent of a dollar a bushel. Fortunately for the national finance, the Senate threw out the Bill and saved the Government from a mistake which in view of the sharp decline in world values would have involved a loss of many millions sterling., Redemption Loan Over Subscribed. Australia’s great recuperative capacity is proved by complete success of the £28,000,000 Commonwealth Redemption Loan which has just been over-sub-sciibed, after the shortest campaign since the Commonwealth has floated loans in the local market. The loan was opened under the most unfavourable auspices, owing to the wild talk of the Left Wing of the Labour Party which actually passed a resolution the day before the Loan was announced, instrucing the Government to convert compulsorily. Fortunately for Australia, this resolution was defied by the Act-ing-Treasu. jr (Mr J. a. Lyons), who declared that he would sooner leave .public life than be a party to such a policy. Mr Lyons’s defiance of the Labour Party, caused a wave of en-

thusiasm throughout the country which has resulted in the loan being over-subscribed. In consequence, Mr Lyons is now a national hero. His name is upon everyone’s lips throughout the Commonwealth, and it seems that he will be the next Prime Minister. As an antidote to the demand for repudiation by Labour extremists, Mr Lyons selected for use throughout the loan campaign, the slogan: “Commonwealth Bonds are as good as gold.” This had won first prize in a competition organised by a chain of newspapers throughout Australia. Of the £28,000,000 required, more than £17,000,000 was new cash, thus showing that once confidence is restored, money will be available for the rehabiliation of Australian government finance and for expenditure on development. The success of the loan has renewed confidence in Australia's ability to meet her obligations, and to continue without interruption the great task of developing a young country of 3,000,000 square miles. It will improve the political situation enormously. The Right Wing of the Labour Party will be encouraged in its desire to hold the Lefts in check, and it seems likely that early in 1931, the Labour Party will be split, the Rights led by Mr Lyons, forming a new government which will begin in real earnest the work of national reconstruction. This would deprive the present Labour Party which is dominated by the Left Wing of power, and would ensure sane and stable government during the remainder of the life of the present Commonwealth Parliament. The “wild men” who have done so much to injure Australia’s credit at home and abroad, will be prevented from influencing the government policy except in a constitutional way on the floor of Parliament. Until the split comes, the Left Wing by the use in secret caucus meetings of its majority will continue to usurp the functions of Ministers and to dictate national policy. Australian-Bom Governor-General. History has been made by the announcement that on the recommendation of the Australian Prime Minister, the King has appointed the Chief Justice of the High Court (Sir Isaac Issacs), to the post of Governor-General. Sir Isaacs Isaacs will be the first nativeborn Australian to hold this position. Hitherto, all Governor-Generals have been sent to Australia from London. The Labour Party has always held the view that this post should be filled by an Australian, and as soon as it as- j sumed office last year, steps were taken j to ensure that an Australian would I succeed Lord Stonehaven. The objective of the Labour Party was made easier of accomplishment by the new Dominion status, formulated at the 1926 Imperial Conference, and confirmed at the Imperial Conference just concluded. This laid it down that the Governor-General of a Dominion, is a Viceroy, the personal representative of the King, and not in any sense a representative of the English Government. It was also enunciated, that the appointment of a Governor-General was a matter entirely for the King and for the Government of the Dominion concerned. Acting upon this theory, Mr Scullin some months ago recommended to His Majesty that Sir Isaac Isaacs be appointed Governor-General in succession to Lord Stonehaven. This was such a radical departure from traditional procedure, that the question was raised both in Australia and England, whether the correct procedure was being followed. By mutual consent the matter was deferred until after the Imperial Conference when it was discussed personally by the King and the Australian Prime Minister. The method of the appointment has been severely criticised in England by such journals as “The Times,” and in Australia by a substantial body of citi zens who believe that the abandon'

ment of the old system of sending an English Governor-General to Australia, will cause a weakening of the ties which bind the two countries. The propriety of Mr Scullin’s action in submitting only one name to the King, thus giving him no choice of selection, has been assailed as a virtual limitation of the royal prerogative.

It is agreed by all that the King has no choice but to accept the advice of his Ministers, but it is contended that by submitting only one name, the Scullin Government, for all practical purposes has made the appointment and not the King. Hence it is claimed by those who have put this view, including the Leader of the Opposition, that the Scullin Government has made the office of Governor-General a political appointment.

Sir Isaac Isaacs has had a career which can only be described as miraculous. In his 76th year, he is still as active as an athlete, a hard worker and a hard walker. His reputation as jurist and constitutionalist has been growing with the years ever since 1906, when he was elevated from the Attorney Generalship, in the Federal Government to the High Court Bench. He was a member of the Convention which framed the Australian Constitution, and an original member of the Commonwealth Parliament. In 1921, he became a Privy Councillor. In 1928 he was knighted, and upon the retirement of Sir Adrian Knox early this year, he became Chief Justice.

The Governor-General’s parents kept a small shop in Melbourne when he was a boy, and Sir Isaac Isaac’s private life has been characterised by a touching devotion to his mother whose sacrifice enabled him to obtain the education which gave him his start in life. Gold Bonus Passed.

In an effort to revive the gold industry which has produced £650,000,000 to date, the Commonwealth Government has decided to grant a bonus at the rate of £1 per oz. on all fine gold won in excess of the yield - for 1930. There is expert evidence to show that there is more gold still in Australia than has been taken from its mines. The difficulty is that low grade fields, and high production costs have brought about a decline which has been accelerating ever since 1910. In the ten years, 1900 to 1910, the average annual production of gold in Australia was 3,500,000 ozs. worth approximately £14,000,000. The output in recent years has fallen to about 465,000 ozs. a year valued at £2,000,000. Whereas in 1901, 71,000 men were employed in the industry, it finds work far only 6250 men to-day. Thus the great gold industry of Australia which made it for half a century an El Dorado, has to-day shrunk to unimportance. The proposed bonus, is expected to have the effect of causing an immediate revival. The Government has been assured that £10,000,000 of English capital is really for investment in West Australia, and there will be renewed activity on the once fabulously rich gold field of Bendigo, Victoria. The Bill which has been passed by Parliament limits the operation of the bounty to ten years. Central Reserve Bank Bill. Despite the protests of the Government, the Senate some months ago referred to a Select Committee the proposed legislation introduced into the Commonwealth Parliament by the Labour Government providing for the establishment in Australia of a Go-vernment-owned central reserve bank. The report of the Committee, which has now been tabled, discloses that no central reserve bank in thirty other countries, including Soviet Russia, is given the power embodied in the Bill, to make unsecured advances without limit of amount or time to the Central Government. The Committee, which sought the advice of Sir Otto Niemeyer, the expert sent by the Bank of Eng-

land to investigate Australia’s financial position, rejects unanimously the provisions in the Bill enabling political centrol of the central reserve bank and of the currency to be exercised, and recommends that the Commonwealth Government should not hold more than a one-third ownership in the proposed bank. The remainder of the shares should be held privately, and there should be a limitation of holdings to prevent the domination of any section. Management likewise should follow ownership. Instead of all the directors being nominated by the Government, as provided in the Bill, only one r third should be Government nominees, and the balance should be elected by the shareholders. The report recommends that no profit should accrue to shareholders from the note issue. It states that the provision empowering the bank to make unsecure and unlimited advances to the Government would inevitably destroy the stability of a central reserve bank, and render it utterly impotent to discharge the primary objects of its existence. In a memorandum to the Committee, Sir Otto Niemeyer says the Bill as drafted does not secure the independence of the proposed central reserve bank. After pointing out dangers of political control, Sir Otto strongly supports the Committee’s view that the powers to make unsecure advances to the Government is unsound and undesirable. He adds, “I suggest that the present moment, when Australia has to face serious financial problems, is particularly unsuitable for making a change in the financial structure of the nation.” The Senate has shelved the Bill till next year, and amendments are proposed to bring the legislation in line with the Select Committee’s report. If the Government declines to accept the Senate’s amendments, the first step will be taken in a constitutional crisis which must lead to the dissolution, next year, of both Houses of the Federal Parliament. Canberra Lottery Prohibited. The Commonwealth Government has disallowed the decision by the Minister for Home Affairs to permit the establishment at Canberra of a lottery under Government supervision, with the object of devoting certain of the profits to the relief of unemployment in the Federal Capital territory and to the beautification of the city. Widespread surprise and hostility were expressed throughout Australia when the Minister’s decision was announced. The project of a permanent lottery at the national capital was denounced inside and outside Parliament as a national humiliation, and as inconsistent with the traditions of government in Australia. In the course of a debate in the House of Representatives, the view was expressed that the introduction of gaming on such a scale would be a pollution of the capital city. The idea of the promoters of the scheme was to organise a permanent lottery with prizes ranging from £SOOO downwards. Drawings would take place at least once a month, and the lottery would have been advertised all over the world. Relief will be felt by most Australians that the national Government has, in yielding to public opinion, nipped in the bud a scheme which would have proved a doubtful advertisement for Australia. -