§ 47. Sir John Mellorasked the Chancellor of the Exchequer if he is in a position to state whether it is the intention of the Government that all established claims against the assets covered by the Czecho-Slovakia (Restrictions on Banking Accounts, etc.) Act, shall rank pari passu or otherwise; and whether he can give an indication of the procedure to be adopted for settlement?
§ Sir J. SimonIt is the intention of the Government to obtain protection for British holders in respect of financial claims on Czecho-Slovakia, but I am not at present in a position to state the detailed principles on which claims will be dealt with or the procedure to be adopted.
§ Sir J. MellorCan my right hon. Friend give any indication as to whether the holders of bonds are to be compensated on the basis of their face value or on the basis of their market value on some selected date?
§ Sir J. SimonThat is one of the many questions which have to be considered.
§ 50. Mr. Noel-Bakerasked the Chancellor of the Exchequer why, since it is the principle that the policy of the Bank of England in its relations with foreign central banks is always guided, so far as political questions are concerned, by the views of His Majesty's Government, he was not consulted by the Governor of the Bank of England before he agreed to the decision of the Bank for International Settlements that foreign assets of the Czecho-Slovakian Government should be transferred to Germany?
§ 51 and 52. Mr. Arthur Hendersonasked the Chancellor of the Exchequer (1) whether he will give an assurance to the House that in future His Majesty's Government will expect to be informed by the British representatives on the Bank for International Settlements of any proposal to transfer to the aggressor the assets of the victim of aggression, in accordance with the established practice of consultation between the Treasury and the Bank of England;
(2) what action His Majesty's Government, as a signatory of the Protocol, proposes to take to prevent a repetition of the action of the Board of the Bank for International Settlements in handing over the assets of a Government which has been the victim of aggression to the aggressor?
§ 59. Mr. Pethick-Lawrenceasked the Chancellor of the Exchequer whether, in view of the recent complete subordination of the Reichsbank to the German Government, he will reconsider his view that it would be improper for him to consult with the representatives of the Bank of England who sit on the Board of the Bank for International Settlements as to their line of policy on that body?
§ Sir J. SimonThe assets referred to are, I understand assets entrusted to the Bank for International Settlements by the National Bank of Ceczho-Slovakia. As I have already stated to the House, His Majesty's Government cannot accept responsibility for the actions of the Bank 2007 for International Settlements and the British members of the Board of the Bank for International Settlements are not responsible to His Majesty's Government. They must act according to their judgment under the authority which they derive from the Statutes of the Bank for International Settlements which, in turn, are laid down by the International Convention of 1oth January, 1930. The British directors could not therefore be asked to accept responsibility to His Majesty's Government. The House will, I think, be agreed that His Majesty's Government ought not to disregard treaty obligations towards the Bank for International Settlements which have been solemnly entered into by this country in common with other countries.
§ Mr. Noel-BakerDid not the Governor of the Bank of England in this case settle a question of foreign policy without consultation with the Treasury, and how can that accord with the principle which the Chancellor himself laid down, and which I have cited in the question?
§ Sir J. SimonThe Governor of the Bank, as I have explained more than once, acts because the constitution of this body, which was created by the Treaty of 1930, provides for his membership. That does not make him in the very least the spokesman of the British Government, and I still take the view that in political matters, and only in political matters, can the Treasury properly intervene.
§ Mr. Pethick-LawrenceCan the right hon. Gentleman really maintain, in view of what is the case in other countries, which have representatives of their banks on the Bank for International Settlements, that in this country alone the representative of our central bank is not to be in touch with our Government on matters referring to the Bank for International Settlements?
§ Sir J. SimonI think that if the right hon. Gentleman will refresh his memory on the articles in the Treaty, he will see the true position. The present Government are not responsible for this. This is an arrangement that was made by the Government of 1930, and they then entered into the solemn treaties which the present Government have got to observe.
§ Mr. Pethick-LawrenceDoes the right hon. Gentleman suggest that there is any- 2008 thing in the Treaty which prohibits the Government from discussing these matters with the Bank of England?
§ Sir J. SimonI think there is no doubt that, on a fair reading of the constitution, it is intended that the Bank for International Settlements should not be influenced by political considerations directed by any Government at all. I quite agree that a very anomalous position arises when, in the case of another Government, the head of their bank is also an official of the Government, but in the Treaty which the Government of 1930 made, and the articles of which they approved, there is this article:
No person shall be appointed or hold office as a director who is a member or an official of a Government or a member of a legislative body, unless he is the governor of a central bank.I very much regret that there should be such a position.
§ Mr. A. HendersonIn view of the fact that His Majesty's Government were first informed of the proposal to transfer these assets by the French Ambassador, does not that indicate that the French Government were themselves informed by the French representatives on the board of the Bank for International Settlements, and does not that certainly indicate that the British representatives had a similar duty towards the British Government as the French representatives had towards their Government?
§ Sir J. SimonI do not think so.
§ Sir William DavisonIs it not very desirable, in view of what the Chancellor has just said, that notice should be given with regard to the termination of this Treaty, or the alteration of its form, in view of the understood meaning of the Treaty being entirely altered by practice?
§ 54. Mr. G. Straussasked the Chancellor of the Exchequer on what date His Majesty's Government were asked by the French Government to consider whether effective steps could be taken to prevent the transfer of the Czech gold held by the Bank for International Settlements to Germany?
§ Sir J. SimonThe date was 24th March.
§ Mr. StraussIs it not a fact that when the Government said previously that they heard of this matter only through an indirect Continental source, it was, in 2009 fact, an official request of the French Ambassador in London to this Government to take some action?
§ Sir J. SimonNo, Sir. The hon. Gentleman may be referring to something I said earlier in the Debate. My statement was quite accurate. I was not referring to this communication. We had already heard it from an indirect source.
§ Mr. BoothbyMay I ask what reply was made to the French Government?
§ Sir J. SimonThat is a question that has already been answered, as my hon. Friend will see from the Official Report. I think an hon. Member opposite put a question the other day.
§ Mr. StraussIs it not a fact that the right hon. Gentleman did have a request made to him a day later, on 25th March, from the French Ambassador?
§ 56. Mr. Manderasked the Chancellor of the Exchequer whether he will consider the advisability of proposing that a conference should be held of the States signatories to the International Convention, 20th January, 1930, setting up the Bank for International Settlements, Great Britain, France, Germany, Italy, Japan, Belgium, and Switzerland, with a view to an alteration of the organisation of the Bank shown to be advisable as the result of the recent transfer to Germany of assets the property of the former Czechoslovak State?
§ Sir J. SimonI do not consider that the action suggested in the question would be at all likely to achieve the purpose which the hon. Member has in mind.
§ Mr. ManderIn view of the fact that the Chancellor has just stated that the Statutes of the Bank for International Settlements are no longer being observed because the German member is acting under the orders of his Government, does not the right hon. Gentleman think that some steps are necessary to alter the present situation?
§ Sir J. SimonI must not be misunderstood. Whether one regrets it or whether one does not regret it, I did not say that the terms of the Statutes were not being observed. The States provided for the very representation of Germany which now exists on the board. I do not myself think that the calling together of the 2010 States listed in the question would be likely to lead to unanimous agreement.
§ Mr. ManderIs the Chancellor really satisfied with a position which leaves the Axis Powers in a majority and enables Germany to steal £6,000,000?
§ Sir J. SimonI have said more than once what my own view is. I have never differed in the very least, but I think the hon. Gentleman will agree with me that if we find ourselves bound by a treaty, we must find some lawful way of getting out of it.
§ Sir Herbert WilliamsMay I ask my right hon. Friend whether a refusal on the part of the Bank of England to cash cheques would not result in a panic withdrawal of all foreign currency?
§ Mr. Noel-BakerCan it be in accordance with the Statutes that the Bank for International Settlements should violate international law by handing over assets to which Germany had no legal claim, and will the Chancellor call a conference in order to put that right?
§ Sir J. SimonI should be very glad to see any conference put anything right, but I do not think it is a very practical suggestion to take this list of States mentioned in the question and suggest that by calling a conference, it would put something right.
§ Mr. ManderWhat are you going to do about it, then?
§ Sir Archibald SinclairWhat lawful action—to use the Chancellor's own words—is he going to take to put the matter right?
§ Sir J. SimonI think this event is a very deplorable event. I have never for a moment hesitated to say so. It is also a very unusual event. The general usefulness of the bank in other connections is, I think, accepted by most authorities. I do not myself yet see what method could usefully be taken to put an end to the Bank for International Settlements.
§ 61. Mr. Sandysasked the Chancellor of the Exchequer what functions are at present performed by the Bank for International Settlements; whether these, in the opinion of the Government, justify its continued enjoyment of special privileges and immunities in this country; and, in view of the fact that these 2011 privileges are being used to undermine the peace policy of His Majesty's Government, whether he will consider the advisability of denouncing the relevant treaty, or, alternatively, of establishing some more effective co-operation between the British Government and the Bank of England's representatives on the board?
§ Sir J. SimonThe functions of the Bank for International Settlements are set out in Article 3 of the Statutes. These functions follow the recommendations contained in the report of the committee of experts, dated June, 1929 (Command Paper 3343), which expressed the hope that the bank would become an increasingly close and valuable link in the co-operation of central banking institutions generally. The question whether the bank should continue to enjoy special immunities in this country is, I think, quite a separate one. Without accepting the comments contained in the question, I may say that I am advised that the existing immunities could not be brought to an end except by common agreement between all the Governments which are parties to the relevant international agreements. As regards co-operation with the British representatives on the board, I would refer to the replies given earlier to-day.
§ Mr. SandysWill my right hon. Friend, in view of what he said earlier about this deplorable event, make it clear to the governor of the bank that unless the British representatives in future exercise a greater sense of responsibility in the performance of their functions there will be a growing and insistent demand for the withdrawal of these special immunities and privileges?
§ Sir J. SimonI think the many questions which have been put and answered in this House on the subject will go to show the view which is taken in the House on this matter.
§ Mr. SandysMay we have an assurance that the Government themselves will make representations to the bank to that effect?
§ Sir J, SimonI think a more important matter is that I should make it plain for my part, as I have done throughout, that I regret that this happened. I have done my best to discover whether there is any means by which I could change the constitution of the bank, but, obviously, there are very great difficulties about it.
§ Mr. SilvermanWill the right hon. Gentleman consider that one method of securing the control which he would like to have would be to nationalise the Bank of England so that the governor of the bank would then be an officer of the Government?
§ 62. Mr. G. Straussasked the Chancellor of the Exchequer whether any discussions were held with, or representations made to the Bank of England directors on the Bank for International Settlements before 19th May, concerning the transfer of Czech assets to Germany?
§ Sir J. SimonThe Bank of England was informed of the oral communication from the French Government as to which I made a statement in reply to a question by the hon. Member last Thursday, and of the reply of His Majesty's Government to this communication.
§ Mr. StraussIs not the situation this, that the French Government asked the British Government whether they could do anything to stop this transfer and that the British Government made no representations to Mr. Montagu Norman or Sir Otto Neimeyer who proceeded to Basle to support the transfer of this gold?
§ Sir J. SimonIf the hon. Gentleman looks at the answer which I gave last Thursday, he will find that it shows the attitude of His Majesty's Government.
§ Mr. A. HendersonCan the right hon. Gentleman say why it was that the French Government knew of the proposed transfer of the gold before the British representatives on the Bank for International Settlements?
§ Sir J. SimonI cannot say.