§ 62. Mr. Boothbyasked the Chancellor of the Exchequer to what extent, and why, His Majesty's Government has approved the restriction of the circulation of municipal bills?
§ Sir J. SimonI assume that my hon. Friend refers to the recent decision of the Bank of England to accept for discount only the bills of those local authorities to whom Parliament has granted specific statutory authority to borrow by such means, and to the decisions of the London Clearing Banks and the Scottish Banks to accept only bills eligible for re-discount at the Bank of England as security for money market loans. This measure of market regulation, which allows the circulation of bills issued under specific Parliamentary authority, has my sympathy and approval. The circulation of a large and unlimited volume of municipal bills would be open to grave objection both on general grounds and particularly because in any time of crisis the renewal of the bills might be impossible.