§ Mr. Attlee
(by Private Notice) asked the Chancellor of the Exchequer whether his attention has been called to the announcement made yesterday in the United States of America by the Secretary of the Treasury in regard to the inactive gold account?
§ Sir J. Simon
Yes, Sir; I had been informed that it was the intention of the Secretary of the United States Treasury to make an announcement on these lines. The view which underlies the announcement, as I understand, is that it is desirable in present conditions to modify arrangements which may have or be feared to have a deflationary tendency and so act as a brake on business activity. With this view I cordially agree. I would add that the measure announced is in line with the general policy of easy credit which I have hitherto regarded and continue to regard as appropriate to this country.
§ Mr. Pethick-Lawrence
While I appreciate that the underlying object of the policy announced in the United States and of the policy which the Chancellor of the Exchequer is pursuing in this country may be similar, I take it that he does not suggest that the means which the United States are proposing to adopt are in any way identical with the policy which the Government are pursuing here? In the second place, I take it that if, as a result of the policy adumbrated in the United States, there should show itself any considerable change in the exchange value of the dollar, the Government will keep a very close eye on that, and prevent it from having a deleterious effect on British industry?
§ Sir J. Simon
As regards the first of the right hon. Gentleman's questions, I agree with what I think he implied, that the currency arrangements in the two countries are widely different. We have continuously avoided deflationary measures here, and I think our existing arrangements are adequate. As regards the 1713 second question, I agree with the right hon. Gentleman that we must see if any results manifest themselves from the announcement in America, and we shall carefully watch the results and take action accordingly.
§ Mr. Grenfell
Is it not true to say that, when gold is bought up and segregated in large quantities, as in the case of America at the present time, that must always have a deflationary effect?
§ Mr. Graham White
Are not these considerations covered by the original tripartite agreement between America, France and ourselves?
§ Sir J. Simon
I think that the answer I gave to the right hon. Gentleman opposite really covers this point. Nothing that is here indicated is any sort of departure from the agreement. The principle of that agreement remains, and it is respected, I believe, by all the parties to it. We have no intention whatever of departing from it. Our methods are not quite the same as those which obtain in the United States, and I do not consider that, because this step has been taken in the United States, it follows that we should take exactly the same form of step, but we desire to maintain a common position.