Capitalstrike
The Whitlam government had determined that it would need to raise$4 billion to fund urgent energy development needs, including a natural gas pipeline; petrochemical plants; uranium plants; the upgrading of export harbours; further development of the Cooper Basin; and electrification of rail facilities. In a 9 July 1975parliamentary speech, Connor announced that Australia’s proven recoverable reserves of minerals and energy were worth an“astronomical” $5.7 trillion (in 1975 terms!), representing a security ratio of $1,425 in assets for every $1 in proposed borrowing. Connor declared that this was the “best security ever offered to overseas lenders” and slammed the Opposition’s complaints about the size of the proposed loan, saying it was“peanuts” compared with the depth and range of Australia’sr esources.
However, the traditional finance centres of Wall Street and theCity of London refused to extend credit to the Whitlam government,even though Australia had an excellent credit rating. Connor believedhe was facing a capital strike, and blasted the “same internationalforces and their Opposition puppets which frustrated the early birthof the Australian Industry Development Corporation and whichdestroyed Prime Minister Gorton [who] now turn their malice, theirspleen and their venom on an Australian Government which stands intheir path as they seek to enlarge further their grip on Australia’sresources of minerals and energy.” Connor declared that Australia’soffence, “in the eyes of certain international forces”, wasborrowing on the credit of Australia, rather than thealternative—which was for those funds to come into Australia asforeign investment and foreign ownership, which Connor said had been“the tragedy of Australia’s development hitherto”.
In late 1974, the Whitlam government decided to pursue funding from oil-producing Middle Eastern countries, which were newly awashwith petrodollars in the wake of the 1973 oil crisis. This was afunding source which had recently been tapped by the International Monetary Fund and the governments of Japan, France and the United Kingdom. The situation would ultimately spiral into the so-called Loans Affair, in which key figures of the Whitlam government,including Rex Connor, were targeted and publicly discredited in a media storm over alleged impropriety, although no loan was everobtained and no commissions were paid. Veteran Australian journalist John Pilger has documented that the CIA’s fingerprints were allover the Loans Affair scandal.
Notably, establishment firms of the City of London played a less-publicised role in the Loans Affair. One of the primary figuresin the scandal,CIA-linked bankrupt Tirath Khemlani, was introduced to Connor on recommendation of a prestigious London bank and bullion firm, Johnson Matthey, one of the five institutions which set thedaily gold price. Johnson Matthey’s glowing recommendation of Khemlani was communicated through the Australian government’s legaladvisers in London, Coward Chance & Co., a company whose predecessors had worked for the London Clearing House since itsfounding in 1888. Coward Chance & Co. also represented the interests of a plethora of major multinational oil companies,including companies in the “Seven Sisters” international oil conglomerate.
Opposition Leader Malcolm Fraser used the Loans Affair scandal as justification to block supply in the Senate, intending to force another general election. Governor General John Kerr, who had link sto British and American intelligence, used the situation as justification to controversially dismiss Whitlam on 11 November 1975.
From Australian Citizens Party, Australian Alert Service, 7 August 2024, Vol. 26 No. 32
That was the end of Australia's chance for sovereignty thanks to a joint effort by the Anglo-American powers, to be capped by a coup in November 1975, dismissing the democratically elected Whitlam government.
