HC Deb 13 April 1937 vol 322 cc782-3
50. Mr. Boothby

asked the Chancellor of the Exchequer whether, to allay public anxiety, he will give the House an assurance that His Majesty's Government have no intention of taking action to check the rise in commodities by raising the price of sterling in terms of gold, in view of the deflationary effect it would have; also that the maintenance of cheap money remains a fundamental objective of Government policy?

Mr. Chamberlain

It is not at present part of the policy of the Government to maintain a fixed price for gold in terms of sterling, but the price of gold is, of course, one of the factors to be taken into account in determining their monetary policy from time to time. They are fully alive to the undesirability of interfering with the flow of business towards recovery. With regard to cheap money, I will refer my hon. Friend to the answers given to my hon. Friend the Member for the Evesham Division of Worcester (Mr. De la Bére) yesterday.

Mr. Boothby

Is it not a fact that, taking into account the depreciation of the currencies, the present level of commodity prices is very much lower than it was in 1929; and can the right hon. Gentleman give us an assurance that he does not intend to adopt a monetary policy in this country which would tend to lower commodity prices?

Mr. Chamberlain

I cannot add to my answer.

Mr. Loftus

Would not a mild degree of deflation, to check a too rapid rise in prices, be more desirable than severe inflation, which would intensify the fall in prices during a slump?

Mr. Chamberlain

That is a matter of opinion.