§ Sir SAMUEL HOARE(by Private Notice) asked the Chancellor of the Exchequer whether he has given consideration to the possibility of reintroducing the system of offering Treasury Bills by tender and thus leaving it to the market to fix the rate for Treasury Bills in accordance with demand and supply?
The CHANCELLOR of the EXCHEQUER (Sir Robert Home)I have come to the conclusion, after full consideration and consultation, that I should be justified in making a renewed effort to restore the tender system. Accordingly, 746 beginning on Thursday, 21st April, tenders will be received for a limited number of Treasury Bills to be dated, at the option of the tenderer, on any business day during the week beginning on the following Monday. The bills will be in the same denominations as at present, but it will be necessary in order to bring the work of dealing with tenders within reasonable compass to revert to the pre-War practice of requiring all tenders to be made by or through a bank, discount house or broker, and to limit tenders to amounts of not less than £50,000.
Formal notice will be given in regular course in the Gazette of next Friday, 15th April, of the first offer of bills by tender, and I would refer hon. Members to that notice for fuller particulars of the methods proposed to be followed
In addition to the Bills offered for tender, applications will be received according to the present procedure from day to day, as and when and for such amounts as the Treasury may determine, for "additional" Treasury Bills to be dated the business day next succeeding the date of applications at prices which will be fixed so as to yield rates of discount below the average rates at which Bills of like tenor were sold by tender on the Thursday of the preceding week.
Bills issued to public departments will be sold at the rates fixed for "additional" Treasury Bills sold to the public.
In the first instance, it will be desirable to confine the new system of selling Treasury Bills by tender, and "additional" Treasury Bills (at rates based on the results of tender) to Three Months Bills, and to keep some Twelve Months Treasury Bills on offer as at present at fixed rates.
§ Mr. BOTTOMLEYDoes that answer represent the right hon. Gentleman's own considered view, or has it been foisted upon him by the banks?
§ Sir R. HORNEIt is my own considered view.
§ Sir W. JOYNSON-HICKSAre the additional Treasury Bills at average prices to be limited to the amount of £50,000 or may they be had in smaller amounts?
§ Sir R. H0RNEI do not know that that is quite settled at the moment; but so far as the new Bills for Tender are concerned they must be applied for in the amount I have stated.
§ Sir W. JOYNSON-HICKSBut having regard to the fact that many people cannot afford to apply for such big amounts—no one but the banks in fact—will the right hon. Gentleman consider the advisability of keeping the offer open for average Treasury Bills in smaller sums?
§ Sir R. HORNEI certainly will.