§ 29. General CROFTasked the President of the Board of Trade what is the indebtedness of the German banks to the Bank of England and to the other great City banks, respectively?
§ The CHANCELLOR of the EXCHEQUER (Mr. Bonar Law)The indebtedness of the German banks to the Bank of England on the 31st May, 1918, 2361 arising out of advances made to meet acceptances under the Treasury scheme of September, 1914, amounted in the aggregate to £970,454, namely:
No amounts are due by any of the German banks in London to joint stock banks in the City.
Dresdner Bank … … £602,222 Disconto Gesellschaft … … 368,232 £970,454
§ 30. General CROFTasked the President of the Board of Trade whether, as the continuance of the German banks is a cause of uneasiness in business circles, the Government will order the German banks to be closed at once, undertaking to guarantee the Bank of England and the City banks against any loss resulting from such a policy rather than keep them open?
§ Mr. BONAR LAWTo whatever extent the feeling of uneasiness referred to in the first part of the question exists, it is, I believe, due to a misunderstanding of the actual position. The banks are not open for business and have not been for nearly four years, except under strict supervision, to close pre-war transactions and to carry out orders made by the Court and by the Board of Trade for vesting enemy securities in the Custodian. This task is of great magnitude and is being proceeded with as promptly as possible as and when the orders are made. Considerable quantities of securities have already been passed to the Bank of England for account of the Custodian. The occupation of premises by the banks with adequate strong-room accommodation is not any justification for the statements so often made that the banks are carrying on business. The annual reports of the Controller make this fact quite clear.
§ Sir J. BUTCHERIs there any reason to hope that the liquidation of these banks will be completed finally in the course of the next six months or a year?
§ Mr. BONAR LAWMy information is that it cannot be finally completed till the end of the War without great loss of money, not to German but to British and Allied creditors.
§ Sir J. BUTCHERWould it not be possible to give up the premises of the German banks and keep things in statu quo until the War is over, when any outstanding accounts can be readjusted?
§ Mr. BONAR LAWI think that is being done as far as possible. They are not in any sense acting as a bank at present.
§ Sir E. CARSONMay I ask whether these banks, at the end of the War, in view of the way in which they are now being conducted, will be liable to be reopened in the interests of Germany?
§ Mr. BONAR LAWI do not think the way they are being conducted will have any effect upon that point. The question surely is a question of destroying the goodwill. Under the law—unless the law is changed—any country at the end of the War may open banks; that is a question for the Government of that day, and also not a question by itself.
§ Major BOWDENWill the law, in regard to Germany, be changed after the War?
§ Mr. BONAR LAWObviously no one, speaking now, can say what the decision of the Government may be. Clearly the question is one which must be considered; but this does not apply to the banks alone, but to many other things.