CLAUSE 2.—(Certificates Covering Issue of Notes.) (Hansard, 27 August 1914)

§ Sir J. HARMOOD-BANNER
In reference to this Clause, will the Chancellor of the Exchequer tell us the terms which will have to be paid on obtaining this certificate? Whilst this certificate is going to be a power of credit to lend money, people can replenish it under the certificate, and that is only a partial aid to the finances of the country. Mention was made yesterday of the fact that some bankers were doing their duty, but as far as I know the bankers are treating this question very well. You cannot expect a banker to lend money to a customer of whose solvency he is not certain. Therefore, however much you may give him the right of this certificate, and the right in making a loan to replenish under the certificate, you cannot say to a banker. "You must do that which is more or less imprudent—that is, lend money to a man of whose solvency you are not certain." I know there are certain difficulties in regard to knowing who is solvent and who is not. There have been many transactions with the Germans in regard to which debts have been created. Take, for example, a manufacturer of woollen goods. He has sold them, and large sums are owing to him—

§ The CHAIRMAN (Mr. Whitley)
I do not think that question arises on this Clause. The hon. Member's first question as to the terms on which the certificate should be granted was in order, but the general banking question cannot be discussed on this Clause.

§ Sir J. HARMOOD-BANNER
I do not think this certificate goes far enough, and I wish to know if the Chancellor of the Exchequer could see his way to do something to meet the case of lending money to people in doubtful circumstances.

§ The CHAIRMAN
That question is much too large to come under this Clause, although it might be in order on the Third Reading.

§ Mr. DAVID MASON
I understand that the hon. Member who has just spoken asked for the terms upon which these certificates were issued to the bankers. I had a question on this point yesterday, and I should like to support the query of the hon. Member as to the conditions upon which these certificates have been issued to the banks. Can the Chancellor of the Exchequer tell us what powers there are for redeeming these certificates? I want to know if they can be called in, and are there any powers for redeeming them? If an unlimited power is given to the Treasury to issue these certificates, I think before giving such vast powers we should qualify them by certain provisions to prevent those powers from being abused. I hope the right hon. Gentleman will be able to inform the House whether there are any powers for dealing with these certificates when the emergency has passed.

§ Mr. HARRY LAWSON
I would like to ask if the Chancellor of the Exchequer is going to make any discrimination between the banks in the issuing of these certificates. If there are any banks who have not given these facilities, will the right hon. Gentleman use this as a lever to obtain fair terms? The right hon. Gentleman may not wish to answer my question, but I think this is a weapon which could be fairly used in case the Chancellor of the Exchequer thinks that certain banks have behaved without proper consideration for the public interest.

§ Mr. LLOYD GEORGE
The hon. Member for Everton (Sir J. Harmood-Banner) has raised a very wide question. All I wish to say now is that I do not agree with what he said about the bankers. It seems to me that the country has taken a very great risk in supporting the bankers, and I hope the hon. Member will bear that in mind, and but for this they would not have been in quite as good a position as they are to-day. If the country is prepared to take risks on their behalf it was done in order to enable them to take risks on behalf of the country. Therefore I decline to take the view expressed by the 200 hon. Member, and I hope the bankers are not likely to take that view. If they do, the Government will have to come to the House and ask for wider powers.

§ Sir J. HARMOOD-BANNER
I was not taking that view. I only wanted information upon it, because I thought it was possible that that view might be taken.

§ Mr. LLOYD GEORGE
I hope not, but I do not propose to pursue that point. In the course of two or three days I shall make a fuller statement upon the commercial position, when I hope hon. Members will be able to discuss the matter. At the present time I would rather not give an answer to one or two other questions of the same kind which have been put to me. One of those questions was as to the terms. I think it would be a mistake to reveal part of the terms without putting the whole question before the House. Therefore, for the moment, perhaps, the House will excuse me answering any question in regard to the terms upon which the certificates are issued. At present it is a question as to whether it is desirable or not that certificates should be issued. We shall come to the discussion of the terms later on, and I think it is better that those terms should be discussed as a whole rather than partially. There is a good deal to be said for the suggestion which has been made by the hon. Member for Mile End (Mr. Harry Lawson), but I do not think the time has yet come for putting it into operation. That is one of the reserves which we shall have to avail ourselves of if the bankers take the view that it is not their business to take risks in order to support the industries of the country at this particular juncture. I do not, however, think that they are likely to offer any objection. I think things are improving very considerably, especially during the last two or three days. I hope that before the discussion takes place I shall be able to put even a more satisfactory statement before the House than I did yesterday.