GOVERNMENT SECURITIES. (Hansard, 5 February 1931)

§ Mr. CHURCHILL
I ventured to send a note to the Chancellor of the Exchequer that I desired to raise a question of finance upon the Adjournment this evening, and I should like to express to the right hon. Gentleman the Chancellor of the Exchequer my sense, and also the sense of hon. Members on this side of the House, at his courtesy in being present at, I believe, some personal inconvenience. I wish to ask the right hon. Gentleman a question in regard to the rumours which have been circulated today of an impending Development Loan. The right hon. Gentleman is no doubt aware of some considerable depreciation in the gilt-edged market, which is no doubt of a temporary character, but it has led to the belief that the issue of a somewhat considerable Development Loan is imminent. This has a very important financial bearing. Obviously, it is a competing factor with any prospect of conversion, but it also has a political significance which will excite interest in all parts of the House, and in no part more than in the quarter, or rather the octave, which is represented on the benches below the Gangway. We are all most interested to know whether there is any foundation in these rumours or not.
For my part, I have very little doubt that the Chancellor of the Exchequer 2256 has stood to his guns, and that he has repulsed all inroads upon his financial impregnability, and is still standing firm on all those principles of Treasury orthodoxy which have been inculcated upon many occupants of his office, but have never been received with more native enthusiasm than by himself. But I do not want to stand between the House and the Chancellor of the Exchequer. Can he tell us exactly what has happened? It is not for us to judge, still less to pre-judge, the event, but it is for us to ask whether at this moment he has any statement to make to the House.

§ The CHANCELLOR of the EXCHEQUER (Mr. Philip Snowden)
I am obliged to the right hon. Gentleman for giving me an opportunity of speaking with regard to the rumours which, I understand, have been prevalent during the closing hours of the Stock Exchange this afternoon, with the result that there has been a fairly considerable fall in most Government securities. In ordinary circumstances it would be, perhaps, a waste of time of the House of Commons to deal with every rumour that spreads about. There are exceptions to every rule, and I think the right hon. Gentleman is quite justified in raising this matter to-night. There is no intention whatever—[Interruption.] My financial orthodoxy is still in a state of virginity. But this incident shows that rumours can very seriously affect, and detrimentally affect, the position. From this there is a lesson to be learned which I am not going to draw to-night. As the right hon. Gentleman said, there are both financial implications and political implications, but I will leave the political implications for some other time.
The policy of the Government, as I have repeatedly stated, and as I stated on the last occasion yesterday, is that we are prepared to foster and encourage every sound and economic scheme of national development, but such schemes will be financed as they have been 2257 financed in the past. There is no idea—it is almost a humiliation to have to say it—of putting forward a spectacular national development loan. Any scheme will have to be, first of all, very carefully considered and thoroughly sifted, and if the conclusion is reached that it would be to the national advantage that such a scheme Should be promoted, then the finance of the scheme will be found in the ordinary way. I conclude by repeating that there is no foundation whatever for the rumour. I hear that it was also associated with conversion operations. That exposes the foolishness of these rumours. I do not suppose that any advice I give to the Stock Exchange will have much influence, but really I would 2258 advise them not to regard as serious these rumours, which usually come from a source that cannot be traced. I repeat that I am much obliged to the right hon. Gentleman.

§ Sir HERBERT SAMUEL
As the right hon. Gentleman the Member for Epping (Mr. Churchill) has been good enough to refer to those who sit upon these benches, perhaps I may be allowed to say that no one at any time has ever suggested that a large loan should be floated and that the means of spending it should be considered afterwards.