Unbalanced

Like an outraged uncle faced with the unpaid bills of a spendthrift under- graduate, Sir Otto Ernst Niemeyer, officer of the Bank of England, member of the financial committee of the League of Nations scolded the assembled State Premiers of Australia last week. Then, relenting, he promised that the Old Lady of Threadneedle Street would come to their rescue. "Australia," said Sir Otto severely, "is off its budget equilibrium, off its exchange equilibrium, and is faced with considerable internal and external unfunded and maturing debts. The credit of the country is at a lower ebb than that of any of the other dominions, not excepting India!" The State Premiers, abashed, figuratively beat their breasts and muttered a mia culpa. They knew that what Sir Otto was saying was no more than the truth. Reckless government spending and agile tax-dodging have left the Commonwealth Treasury with a deficit of $70,000,000. There is an additional unfunded debt of $180,000,000. Faced with these figures a month ago Prime Minister James Henry Scullin attempted to give an activating kick to lethargic Australian industry by placing an absolute embargo on an enormous list of imports including almost everything from biscuits, jelly crystals, and horsedrawn hay rakes to canary seed, bay rum, baths and sinks (TIME, July 21). Miserable with pleurisy, Prime Minister Scullin listened to the scolding of Sir Otto Niemeyer, cheered up when Sir Otto announced that the Bank of England was ready to underwrite the $25,000,000 of treasury bills which fall due on Sept. 20, which the Australian Treasury has no money to pay.

In return, the spendthrift State Premiers promised to mend their ways, suggested six proposals which will do a number of Britons and Australians out of comfortable political berths, but should save the Commonwealth 150 millions a year:

1) Abolition of State Governors from England, whose duties may be performed by the Governor General.

2) Elimination of all duplicate State and Federal services.

3) Abolition of the nearly useless Federal Marketing Board with a consequent saving of $2,500,000 annually.

4) Abolition of the six State Agents General in London ($750,000 a year).

5) Unification of Federal and State statistical departments.

6) Reorganization of Federal and State health departments.

To the State of South Australia, now virtually bankrupt, the conference of Premiers promised an immediate loan of $5,000,000.

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