HC Deb 28 May 1936 vol 312 cc2188-9
52 and 53. Mr. DALTON

asked the Chancellor of the Exchequer (1) whether it is the policy of His Majesty's Government to prevent the granting of new British credits to Germany outside the Standstill Agreement;

(2) whether he has satisfied himself, as the result of appropriate inquiries, that no new credits to Germany, outside the Standstill Agreement, have been made within the past 12 months by any British insurance company, acceptance house, or other financial institution?


My right hon. Friend has no legal powers to prevent the granting of new British credits to Germany outside the Standstill Agreement, or to demand information whether such credits have been granted in any particular instance. Moreover, he desires to see ordinary trade maintained and, if possible, increased under the existing Trade Agreement with Germany. As he has previously stated, he has no statutory powers of compelling information to be given to him, but from inquiries he has made he is satisfied that there is no foundation for the suggestion that German rearmament is being financed by credits given in the City of London. I may repeat what he has said before, that he would strongly deprecate the granting of British credit in any form for such a purpose.


In view of the conflict between the answer which the hon. Gentleman has given and what is commonly said in City circles, if evidence should be given to the Treasury that particular financiers or insurance companies are in fact lending money to Germany under this provision, will the Treasury take steps to deal with the matter, and seek powers?


I am not in any way responsible for what may be commonly said in the City of London, but I would certainly answer the hon. Gentleman that, if he has any instances in mind on which this sort of rumour is based, and if he will furnish them to my right hon. Friend, the matter will be investigated.


Will not the policy of His Majesty's Government in this matter depend on circumstances as they arise from time to time?


Every policy depends on that to some extent.


Is it not the case that the Bank of England and the City can only use this credit because they have the backing of the British Government; and, if that is the case, surely the Chancellor of the Exchequer has the power, and can exercise that power against giving credits?