§ MR. BOWLES (Lambeth, Norwood)I beg to ask Mr. Chancellor of the Exchequer whether he is aware that the balance sheet published by the Post Office Savings Bank shows that, on 31st December, 1906, it was liable to its depositors for £156,142,540, all payable at call or at a few days notice, that the securities representing its assets were worth at the price of that day no more than £143,058,808, and that the Savings Bank was therefore insolvent to the amount of £13,083,738; is he aware that on the 20th November, 1906, the liabilities of the Government to trustee savings banks exceeded on that day the value of the securities held by £3,142,593, that the liabilities to friendly societies exceeded the value of the securities held by £247,635, that the total excess of Government liability over the value of the securities held was, in those three cases, £16,473,966, and that the total cash balances hold towards meeting it were no more than £252,757, as shown by Parliamentary Papers, Nos. 73 and 214, of 1907; is he aware that, since those dates, the value of all the securities in question has fallen by from one to two per cent., thereby increasing the total deficiency of assets, and that a forced sale would still further reduce their value; and, in view of the fact that the Consolidated Fund is liable to make good all these and any other and greater deficiencies that may arise, and that these deficiencies are yearly increasing, why does he not take some measure to ensure the holding by the savings banks of an adequate gold reserve, such as bankers in similar cases are expected and accustomed to hold, why does he permit the cash balances to remain as low as they are, and why does he not take measures to reduce this total deficit of over £16,000,000 by charging a portion thereof from time to time upon, and paying it out of, the Consolidated Fund to the insolvent savings banks.
§ The CHANCELLOR of the EXCHEQUER (Mr. ASQUITH,) Fifeshire, E.The figures quoted in the Question, so far as they are drawn from the published returns, are correct. I must remind the 770 hon. Member that a Select Committee of this House in 1902 condemned as misleading the practice of valuing the securities held for these funds at the current market price. The security of the Post Office Savings Bank depositors, of the trustee banks, and of the friendly societies who have invested with the National Debt Commissioners depends, not upon the assets held by those Commissioners, but upon the liability of the Consolidated Fund to satisfy their claims in case of need, as has been stated over and over again in this House by successive Ministers. The reasons which require commercial banks to have command of substantial gold reserves do not apply to the savings banks. The cash balances held on their account are such as experience shows to be necessary for the conduct of the business.