Boss Says Inflate

Trouble closed in last week on James Henry Scullin, Australia's recently invalided Prime Minister, the hero who won in 1929 the most sweeping victory Australia's Labor Party ever scored.

Falling world prices, the refusal of Australian labor to accept lower wages and consequent acute unemployment have driven the Labor Party to propose inflation. Before the Australian Senate last week went a Government bill providing:

1) Inflation through the issuance of $90,000,000 worth of circulating notes (thus diluting by that much the security behind Australia's currency).

2) $60,000,000 of this sum to be spent on unemployment relief, the remaining $30,000,000 to succor Australia's stricken wheat farmers.

This bill, already passed by the House of Representatives, went to the Senate backed by the fiat of Australia's most potent Labor boss, Edward Granville Theodore, Treasurer of the Commonwealth.

"Scullin takes his orders from Theodore" is common talk; but the Senate, as Senates will, refused to take orders, threw out the inflation bill 21 to 6. Encouraged by the Senate, the Commonwealth Bank informed the Government that Treasury overdrafts will not be honored by the Bank above a total of $250,000,000.

Furious, Boss Theodore roared: "This action is an attempt by bankers to usurp the functions of Government! If persisted in. the Bank's ultimatum will mean that within a few days the Bank will refuse to pay checks drawn on public accounts in discharge of payments authorized by the Government."

Is Australia disgusted with Theodore, Scullin & Co.? Believing that she may be, Opposition Leader John Greig Latham (Nationalist) took a drastic step last week. He resigned, handed over leadership to a politician of broader popularity, Joseph Aloysius Lyons, former Acting Treasurer of Australia. He, by attracting to the Nationalist cause waverers and independents, may be able to roll up a vote that will unseat Labor.

In the Labor camp strategists thought that Laborite Scullin would meet the Nationalist challenge by attempting to force a dissolution of both House and Senate. If he succeeds, they predicted, if he goes to the country in a general election promising the unemployed to succor them by inflation, jobless votes may enable him to win.

Nationalist strategy will be to block dissolution if possible, try to capture the House of Representatives by splitting off supporters of Mr. Scullin. During the week Great Britain helped out harassed Australia by granting her a timely moratorium (see p. 19).

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