§ 49. Mr. Priceasked Mr. Chancellor of the Exchequer whether, in view of increased Government borrowing for Defence, he will consider a permanent increase in the fiduciary issue and consultation with the Bank of England authorities, with a view to increasing their holdings of Government securities to act as credit expansion to support the new loans?
§ Sir J. SimonI do not think that this action is desirable. On the general question of the fiduciary issue I would refer the hon. Member to the reply which I gave on 24th November to my hon. Friend the Member for Newcastle-upon-Tyne, North (Sir N. Grattan-Doyle).
§ Mr. PriceIf some increase in the fiduciary issue is not made will there not be, in view of increased Government borrowing, a tendency to deflation before very long?
§ Sir J. SimonThese are technical matters, and as to the facts I would refer the hon. Member to the observations made by the right hon. Member for East Edinburgh (Mr. Pethick-Lawrence) on the Defence Loans Bill.