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Thursday, 19 March 1931

The PRESIDENT (Senator the Hon W Kingsmill (WESTERN AUSTRALIA) - I suggest to honorable senators that questions similar in nature to this one might with advantage take the form of a motion asking that a return be tabled giving the desired information. That would give the Senate an opportunity to decide whether such action should or should not be taken.'

£28,000,000 CONVERSION LOAN.

Senator Sir HAL COLEBATCH asked the Minister representing the Prime Minister, upon notice - 1.Is it a fact that in December, 1930, whilst subscriptions were being invited to the Commonwealth conversion loan of £28,000,000, an assurance was given by the then Acting Treasurer (Mr. Lyons) that no action would be taken by the Government in the direction of inflating the currency ?

2.   Was such assurance given with the knowledge of the Prime Minister?

3.   Was such assurance given with the assent of the Prime Minister?

4.   Was such assurance given on behalf of the Scullin Government?

5.   Does the Prime Minister regard such assurance as binding on the present Government?'

Senator BARNES - The answers to the honorable senator's questions are as follow : -

1.   On the 5th December last, the then Acting Treasurer (Mr. Lyons) issued a statement regarding a number of letters published in the press and many similar letters addressed to him at the Treasury relating to the security of money invested in Commonwealth loans. The statement contained, inter alia, the following: -

In most cases, the writers desired some assurance that the Government would not countenance repudiation of Commonwealth loan obligations or resort to such inflation as would be tantamount to repudiation.

On behalf of the Government, Mr. Lyons stated he had no hesitation in giving the desired assurances.

He did this not only as Acting Treasurer of the Commonwealth, but also in his capacity as chairman of the Australian Loan Council, which body, representing the Commonwealth and all the States, had approved the terms of the present loan. 2, 3, 4, and 5. The assurances were given on behalf of the Scullin Government, but as the Prime Minister was then absent from the Commonwealth, the fact that such assurances were given was not within his knowledge at the time, nor was his assent sought. The Prime Minister, however, agrees with the assurances given by Mr. Lyons as Acting Treasurer and regards such assurances as binding on the present Government.

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