§ 98. Mr. GILLETTasked the Chancellor of the Exchequer whether he can give any estimate of the amount of American money in this country, the retention of which was one of the reasons for the recent rise in the bank rate?
§ Mr. CHURCHILLI am advised that it is not possible to form any definite estimate of American balances in this country. The fixing of bank rate is, as I have already informed the House, a matter for the Court of the Bank of 1519 England. I do not doubt that the possibility of the withdrawal of foreign balances was one of the factors present in their minds. There are, however, many other factors to be considered, such as the call for foreign loans in competition with our own internal needs and in excess of our resources, the danger of a pronounced rise in prices, and, of course, the maintenance of the exchange value of sterling in relation to all other countries, and particularly to the United States of America. This last aspect affects not only the price we pay for our purchases from America of food and raw materials and the payment of our debt obligations to that country; it, also affects the returns which we receive from our still very large volume of foreign investments; and all these factors in their turn influence in an important manner the balance of trade.
§ Mr. WALLHEADWill the right hon. Gentleman say whether the Bank of England raised the bank rate without conferring with him?
§ Mr. CHURCHILLEntirely independent action is taken in these matters by the Bank of England.