HC Deb 27 February 1919 vol 112 cc2044-5

Motion made, and Question proposed, That a sum, not exceeding £31,022, be granted to His Majesty, to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1919, for making good the Net Loss on Transactions connected with the raising of Money for the various Treasury Chests Abroad in the year 1917–18


I should like some explanation of this Vote. I see an Estimate was not required in 1917–18, while the transaction in 1916–17 resulted in a net gain of £737. I should like an explanation why, while there is a net gain of £737 in one year, there is a deficiency in another year of £51,000.


I shall be very pleased to give my hon. Friend the information he requires and to take this opportunity of saying a word about this fund which may not be out of place in a new House of Commons. The Treasury Chest Fund consists of a capital sum of £700,000, created by Act of Parliament for the purpose of making temporary advances for any public service and repaid to the fund out of money voted by Parliament to such services or other money applicable thereto. It is, in practice, a banking fund, with a head office in London, for remitting money to all parts of the world where there are British garrisons or troops. No expenditure is finally charged on the fund, and each year, when the accounts are made up, it shows either a profit or a loss. If there is a profit, that is transferred into the Exchequer; if a loss, the amount is provided for out of a Vote by Parliament. With regard to the point my hon. Friend raised, the loss this year has been made almost entirely on the exchange with Hong Kong. Hong Kong has been during the War a very large naval station. There has been a very rapid rise of the dollar, I and, in accordance with the recommendations of a Committee of this House which reported in 1913, the dollar in the East is issued at a fixed rate, determined each month on the average for the preceding month of the exchange rate in Hong Kong for telegraphic transfers on London. When you get a rapid rise, as occurred in the autumn of 1917, then we lose on the exchange. The loss that we show amounts only to a fraction of 1 per cent. on the very large turnover that had been made in the Treasury Chest Fund during the year. In some years we get the benefit of the exchange and we make a profit. That was the case in the preceding year to which my hon. Friend referred. I hope it may be possible that the process from which we suffered in the year 1917–18 may be reversed in the course of the present year, but, of course, that is a thing over which we have no control. We have also often made a profit on the account, but we have more often, over a series of years, at any rate in recent years, made a loss. That is the explanation of the transaction. We have sundry amounts which have been brought into credit in places where the exchange has been favourable, and a sufficient balance has been accumulated to provide interest, which also comes to the fund. Hon. Members will notice in the statement of accounts that a particularly large sum came from Capo Town this year. There was a reason for that; it was because those who were managing the matter there were apprehensive of the amount which might be required to help to make payments for the troops in South Africa. There we had a substantial payment of interest on money we had accumulated, which is brought to the credit of the fund. In all the circumstances the loss that has been made is one that need not cause us any anxiety, and I do not think the Committee need feel any reluctance in voting this Estimate.