AUSTRALIA’S BIG PROBLEMS.

Timaru Herald, Volume CXXXIV, Issue 18797, 9 February 1931, Page 9

AUSTRALIA’S BIG PROBLEMS.

Stable Finance Required. MR THEODORE’S STATEMENT. United Press Association—By Electrlo Telegraph—Copyright Received February 8, 5.5 p.m.) CANBERRA, February 8. The Federal Treasurer (Mr E. G. Theodore) explained his long awaited financial policy at the Premiers’ Conference advocating the restoration of the 1929 currency levels, and claiming that the adoption of this plan would increase the national income about £100,000,000. He expressed an opinion that this would provide work for between 100,000 and 200,000 persons, and would cause the additional production of material wealth amounting to £30,000,000. He emphasised that a reduction in interest rates, which would be the effect of his policy, was the logical way of escaping from the burden, which was becoming more and more onerous every week. There would be no repudiation of obligations, but there would be equality of sacrifice. Press Comment. The “ Sunday Press” points out that by his speech Mr Theodore enhanced his reputation as a mystery man, for while hinting at a reduction of inter-* est rates, he failed specificially to state how he would carry out his policy, leaving the Premiers wondering whether it was tantamount to inflation. The conference adjourned till Monday. “We all realise,” continued Mr Theodore, ‘‘the possibility of the collapse, public panic and the final crash, if not a social upheaval of a very serious character.” Mr McPhee (Premier of Tasmania): “The crisis is here now.” Mr Theodore: ‘‘l admit that, but the final crash has not yet arrived, and to stave it off, we have to devise some scheme of readjustment. Anyone who has studied the capacity of the banking organisations, to give credit to industry, will admit that they can expand their credit at will. They are limited only by the effect in carrying out such a policy. The banks raised the enormous sum of £283,000,000 in Australia for military operations during the war. I say advisedly, the banks have power to create additional credit. My suggestion is merely the restoration of the value of our currency, to what it was, say, two years ago, which does not mean inflation, but which would enable us to turn the corner towards rehabilitation.” REDUCED EXPENDITURE. RECOMMENDATION OF EXPERTS. United Press Association—By Electric Tel egraph—Copyright (Received February 8, 5.5 p.m.) CANBERRA, February 8. The reduction by £15,000,000 a year In Government expenditure, is the basis of the Three Year Plan, drawn up by the committee of experts to restore Australian prosperity. ‘‘The alternative,” the experts say, ‘‘is default in Government’s payments, the evils of which would be immeasurably greater than the hardship which the nation would be asked to face.” The danger of inflation is strongly condemned. ‘‘This is not the road to recovery,” adds the report, ‘‘but a collapse. A reduction of interest rates by the savings banks is also a possible means of.bringing about a fall in the interest charges. pAsions of all kinds should be revised, and made the subject of close examination. The curtailment of road expenditure is imperative. Employment must be made profitable, and all obstacles to reduce costs must be removed.” FATE OF PREMIERS’ CONFERENCE LITTLE PROGRESS RECORDED. United Press Association—By Electric Telegraph—Copyright (Received February 8, 5.5 p.m.) CANBERRA, February 7. The State representatives at the Financial Conference described the whole proceedings as futile, and serious doubts were expressed whether anything would be achieved by the conference. There is strong criticism of the manner in which the conference is being conducted. It is stated that there was not even an agenda paper, and Ministers had nothing definite to place before them for discussion. Relating to the proposed three years’ plan, Mr Lang stated: ‘‘So far I have not heard a word about a plan, and I have come to the conclusion that the Government has no plan.” The delegations expressed doubt about the success of the conference, which is described as futile. No decisions were reached and the conference adjourned till to-morrow. LONDON PRESS FEARS. AWAITING MR SCULLIN’S LEAD. United Press Association—By Electric Telegraph—Cooyrlglit (Received February 8, 5.5 p.m.) LONDON, February 8. The financial editor of the ‘‘Morning Post” states that Australian stocks are unchanged despite the favourable trade balance figures. Later came the news of the conference at Canberra. It would be unwise to jump at conclusions from the cabled summary, but it almost seems as if Mr Scullin has joined the Labour extremists, in scouting the bankers’ advice. News of the breakdown of the conference, and the implication of a possible collision between the Commonwealth and State Governments and the Arbitration Court do not have an reassuring effect on English investors.