HC Deb 11 February 1932 vol 261 cc1024-5
67. Colonel WEDGWOOD

asked the Chancellor of the Exchequer what loss in sterling was incurred by the Exchequer, if any, in repaying in gold the first credit obtained from France and America; and what loss is estimated as probable on repaying the £80,000,000 on the due date?

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain)

No loss was incurred in respect of that portion of the Bank of England credits in France and America which was repaid in the form of gold. In so far as those credits were repaid in dollars and francs purchased since the suspension in this country of the Gold Standard, it is of course the case that a loss in sterling has been incurred, but this loss is at present much more than offset by the appreciation in the value of the gold held in the Issue Department of the Bank of England. The House has already been informed that the loss will be treated as part of the expenses of the Issue Department for the purpose of determining the profits of that Department which are payable to the Treasury under Section 6 of the Currency and Bank Notes Act, 1928; but I do not think it would be in the public interest to give any further particulars of the transactions in question at this stage. The cost of repayment of the Treasury credits will of course depend on the future course of the Exchange, and I do not think it would be wise at present to attempt any forecast of the result.

Colonel WEDGWOOD

The right hon. Gentleman's predecessor said there would be no loss because there was sufficient gold in the Bank of England to meet the credit. Are we to understand now that this will be a mere book-keeping loss in any case and that the taxpayers will not have to meet it because the gold actually in reserve in this country will have appreciated in value in sterling?

Mr. CHAMBERLAIN

No, I do not think that can be drawn from my answer, but it is obvious from my answer that no estimate can be given at this time as to what the final result will be.

Colonel WEDGWOOD

Is it quite impossible to give any figures as to the loss actually incurred in paying that first £50,000,000?

Mr. CHAMBERLAIN

Yes, I am afraid it is.