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AUSTRAL!! BORROWING
WARNING BY PUBLICIST
ECONOMIC PENETRATION DANGER
'The lesson of the political overlord
ship and interference by. the United
States, 'following on America's economic
penetration of tiie Latin States of Sdutii
America, should be taken to heart by Auo
tralia.' ? , ?
-That is the considered opinion of : Mi.
Theodore l(1ink, of Melbourne, who re
turned to-day on the mail steamer Otrau
to from an extended tour of Europe.
Discussing Australian public - finance,
Mr. link said that there exists through
out Britain a strong feeling of friendship
for Australia. Now, more than at any
previous time, the people there are awak
ening to the possibilities of strengthening
the Empire by mutual trade increases, and
even cash, considerations do not outweigu
that sentiment. At the same. time, criti
cisms of Australia's public finance were
current, the feeling being strong that
Australia has over-borrowed. . .
Necessity for High Taxation.
That feeling was not removed by Mr.
Bruce 's references to our vast potentiali
ties and our realisable w.ealth. Neither
had Mr. Bruce 's .achievement in establish
ing a unified policy for State' borrowing,
and the pifcyision of sinking funds,, obvi
ated the necessity for an improvement of
Australia's public finance. The increase
in Australia's public debt and the dimin
ishing or disappearing retdrns from some
projects on which later loans have been
expended by some of the; States, were re
garded seriously in British, financial
circles, as placing on Australia the neces
sity for high taxation to make good the
shortages. That; meant that an increasing
volume of primary products must be .ex
ported to pay interest charges. . .
It was idle to point to our vast v re
sources and potential wealth— those were
not immediately realisable, and, further,
they should not be bond to the absentee
and the optimistic politician. The tighten
ing up of; the .English , ,.. money _ uuirkel.
should' be' regarded in Australia : as a
warning. It had to be remembered that
though London had not as much money
available as formerly, she is steadily re
gaining her financial position, with the
result that investors had now the choice
between Australian securities offering a
moderate interest, and other issues such
as Brazil, and some local 'corporations,' of?
f ering higher interest and satisfactory,' se-
curities. . ' '., ?'?? .. . . . . ? ...
./.r Blow at Empire's Strength.
In his judgment,1 borrowing from the
United States involved ?iserious. questions
?which Australia must -consider^ ' 1'rom the'
domestic or Empire 'point of vie.w^. almost
every loan so raised was a blow at the
British Empire's strength. It. was said
that trade followed the flag. . It certainly
did so when our external loans were raised
in England, and the proceeds , came to us
in British goods; borrowing from the
United States stimulated' American im
ports, and depressed British, trade ' with
Australia— it . dried up British industry
and commerce, and took the bread; out, of
the mouth of. the '.Briiish workman. ' ;
While he yielded to -none in his desire
to foster- Anglo-American friendship, thai
friendship could and should be increased
by mutual and natural trade. The stimulus
of foreign loans was an evil, and por
tended a grave possibility that Australia
might become like several other countries
a tributary of the United States in a
financial sense. v ?:
. .;? Choking with Gold.
American choking with gold was making
a strong bid for world fame, and .foreign
loans .were- recognised- as a potent influence
?for. that. The. economic .penetration by
the United.' States o' the so-called self
governing States of Latin South America
had heralded in the phrase 'Dollar Diplo
macy,' which meant that in some in
stances America had secured such a large
measure of political control that; self
governmenft was pratically non-existent.
In the case, of a great country like
France even the proposition recently that
she adjust her revenue and finances by
raisin? her Customs tariff was the subject
of astrpns- wrotcst and vigorous opposition
by the United States on the ground .that
it would affect American commerce with
France— and this desnfte the fact that, the
rates proposed were less than those levied
by America, on ? French imports. ': After an
ineffectual resistance lw the French Gov
ernment the nrotest from America actu-.
ally succeeded.
Political Over Lordship. ,
The lesson of nolitical over lordship and
interference by the United States in Souta
America, following economic penetration-—
and the same applies to France to. some
extent — should be taken to heart in Aus
tralia. His own view was that the Ameri
can people as a whole do not desire, to
take up that attitude, but the 'great weight
of the financial world made it felt, not
withstanding. The whole subject of Aus
tralian public borrowing -demanded more
careful and exhaustive thought than it has
hitherto received— -it was 'not' sufficient to
relv on the warnings of bankers, which
were usuallv issued long after the. niischicr
had been done.
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