§ Mr. G. StraussI beg to move,
That leave be given to bring in a Bill to make it compulsory for the Governor and 216 Directors of the Bank of England to consult with His Majesty's Government on all financial matters affecting the national interests.The necessity for this Measure arises from the deplorable affair of the Czech gold transfer to Germany. May I remind the House, in a few sentences, of what happened? The Czech National Bank had entrusted about £10,000,000— half of its reserves— to the safe keeping of the Bank for International Settlements. This money was the savings of the Czech people over a number of years. The bank kept about £4,000,000 in Basle, and the rest with the Bank of England in London. Immediately after Herr Hitler had shocked the world by marching into Prague and putting the people of Bohemia and Moravia under Nazi domination, Germany demanded the transfer of her victim's banking account. We all know why. The coffers in Berlin were becoming exhausted, and additional free exchange was urgently required for the continuation of Germany's armaments programme.The President of the Bank for International Settlements, Herr Beyen, was willing to accede to Germany's request. Not so the French general manager, M. Auboin. The matter was then put to several directors, including M. Fournier, who is a director of the Bank of France, who strongly supported his compatriot, but, for some reason known only to themselves, the British members who were consulted, Mr. Montagu Norman and Sir Otto Niemeyer, equally strongly supported the proposed transfer. These two gentlemen neither consulted His Majesty's Government, nor did they consider it their duty to tell them what they were doing. His Majesty's Government only heard of this important event through an indirect Continental source. This is truly remarkable, as vital national interests were plainly involved. Parliament had already shown its deep concern about the principles involved by passing unanimously the Czecho-Slovakia (Restriction of Banking Accounts, etc.) Bill.
The French directors of the Bank for International Settlements took a very different view of their responsibilities. They immediately put the whole affair before their Government, and on 24th March the French Ambassador asked His Majesty's Government to intervene to prevent the transfer taking place. But His Majesty's Government replied that they 217 could do nothing. In answer to a question of mine on 13th June, the Chancellor of the Exchequer, I think, rather amazed the House by stating that he did not think he was entitled to interfere with the action of the directors of this Swiss Bank. Therefore, in spite of the clear and definite attitude of the British Parliament and the French Government, this £10,000,000 belonging to the Czech people was handed over to Herr Hitler, thanks mainly to Mr. Norman and Sir Otto Niemeyer. I am sure that their action is strongly condemned by every Member of this House, and I believe that the House also condemns the coyness of the Chancellor of the Exchequer in his refusal to bring pressure to bear upon the British members of this Swiss Bank.
Certainly the present situation is intolerable, particularly as we are all aware that it is not really money that has been handed over to Herr Hitler, but foreign raw materials which will enable the Nazis to manufacture probably £100,000,000 worth of aeroplanes, bombs, etc., for the destruction of defenceless civilians. Moreover, if this country is to keep pace with German rearmament, the British taxpayers will have to meet an additional burden of a like amount.
As the Government have so far, in spite of pressure from every quarter of this House, been reluctant to suggest any method of preventing similar or even worse catastrophes in the future, some action appears to me to be urgently required. I, therefore, bring this Bill before the House, without suggesting that its provisions are completely satisfactory. I am convinced that the only real solution of this problem is to bring the Bank of England under full public control, and to make its Governor and Board servants of the people. They would then be unable to embark upon policy, or to take any action contrary to the desires of Parliament and the interests of the nation. I am aware, however, that a Bill of such a nature would not be accepted by this Parliament.
I hope that this Measure, with its limited purpose, may meet with general approval. It seeks only to ensure that the Governor and Board of Directors of the Bank of England, with their special privileges and vast powers, shall consult with His Majesty's Government on all financial matters within their jurisdiction where national interests are involved. It 218 in no way violates the protocol which set up the Bank for International Settlements. I believe that if it had been the law of the land at the beginning of this year and Mr.Montagu Norman and Sir Otto Niemeyer had been forced to consult with the Treasury before they committed themselves at Basle, this Czech money might still be in the possession of its rightful owners and not of the gangster who has robbed them of their land and liberty. I ask Parliament to give permission for the introduction of this Bill, so that the Governor and Board of the Bank of England may never again act in so irresponsible and so deplorable a manner.
§ Sir Herbert WilliamsAll of us regret the fact that Germany seems to have abstracted a certain amount of money from this country which we would all have preferred to stay here, but it is very foolish to allow yourself to be irritated because of a particular transaction. It might lead you into a great mess later on. The Bill, as far as the hon. Member described it, will not in the least effect its purpose. The Bank of England did not do anything that is open to criticism, and if the Chancellor of the Exchequer and the Bank of England had consulted on the matter it would not necessarily have affected the transaction in the slightest degree. A foreign person— I regard the Bank for International Settlements for this purpose as a foreign person — had an account in London and presented a cheque to the Bank of England. [Interruption.] The Bank for International Settlements presented a cheque on their account, and the Bank of England had no option but to honour it.
§ Mr. StraussThat is not the point.
§ Sir H. WilliamsThe hon. Member has not the faintest conception of the consequences of his action if it is carried to a logical conclusion. [Interruption.] Many of us listen with patience to the innumerable questions that are addressed to the House, and at least the other aspect of this matter should be allowed to be stated. There are in London at any given moment enormous foreign assets deposited in our banks which are most useful to us. What is commonly known as the policy of cheap money would be quite impossible if these assets were withdrawn. There would be a panic withdrawal of all foreign assets in London the moment that any London bank refused to cash a foreign cheque.
219 That aspect is one of the gravest consequences to the prosperity and employment of the British people. It would be exceedingly foolish, because we are irritated that a particular transaction has taken a form we do not like, to take the action that has been suggested. I regret that the hon. Member has not stated the terms of his Bill. He states nothing here. He is merely denouncing the Government and the Bank of England and Herr Hitler and some other people, which is always pleasant to do. But we are, in fact, really considering the First Reading of a Bill "to make it compulsory for the Governor and Directors of the Bank of England to consult with His Majesty's Government on all financial matters affecting the national interests."
No single transaction could, therefore,
§ take place at the bank without involving the national interest. This is a proposal that the Governor and Directors of the Bank of England, and the Chancellor of the Exchequer are to be permanently in session. If it does not mean that, it does not mean anything. The hon. Member wants to bring in a Bill which sounds well and will impress people outside, but it is really unadulterated nonsense, and I hope that the House will reject the Motion.
§ Question put,
"That leave be given to bring in a Bill to make it compulsory for the Governor and Directors of the Bank of England to consult with His Majesty's Government on all financial matters affecting the national interests."
§ The House divided: Ayes, 125; Noes, 196.
221| Division No. 194.] | AYES. | [4.0 p.m. |
| Adamson, Jennie L(Dartford) | Hayday, A. | Ridley, G. |
| Adamson, W. M. | Henderson, A. (Kingswinford) | Riley, B. |
| Anderson, F. (Whitehaven) | Henderson, J. (Ardwick) | Ritson, J. |
| Banfield, J. W. | Henderson, T. (Tradeston) | Roberts, W. (Cumberland, N.) |
| Barnes, A. J. | Hills, A. (Pontefract) | Robinson, W. A. (St. Helens) |
| Barr, J. | Isaacs, G. A. | Rothschild, J. A. de |
| Batey, J. | Jagger, J. | Salter, Sir J. Arthur (Oxford U.) |
| Benn, Rt. Hon. W. W. | Jenkins, A. (Pontypool) | Sanders, W. S. |
| Benson, G. | Jenkins, Sir W. (Neath) | Sexton, T. M. |
| Bromfield, W. | John, W. | Silverman, S. S. |
| Brown, C. (Mansfield) | Kennedy, Rt. Hon. T. | Simpson, F. B. |
| Burke, W. A. | Kirby, B. V. | Sinclair, Rt. Hon. Sir A. (C'thn's) |
| Cape, T. | Kirkwood, D. | Smith, Ben (Rotherhithe) |
| Chater, D. | Lawson, J. J. | Smith, E. (Stoke) |
| Cluse, W. S. | Leach, W. | Smith, Rt. Hon. H. B. Lets- (K'ly) |
| Cocks, F. S. | Lee, F. | Smith, T. (Normanton) |
| Collindridge, F. | Leonard, W. | Sorensen, R. W. |
| Cove, W. G. | Lipson, D. L. | Stephen, C. |
| Daggar, G. | Lunn, W. | Stewart, J. Henderson (Fife, E.) |
| Dalton, H. | Macdonald, G. (Inee) | Stewart, W. J. (H'ght'n-le-Sp'ng) |
| Davidson, J. J. (Maryhill) | McEntee, V. La T. | Stokes, R. R. |
| Denman, Hon. R. D. | McGhee, H. G. | Taylor, R. J. (Morpeth) |
| Dobbie, W. | McGovern, J. | Thorne, W. |
| Dunn E. (Rother Valley) | Maclean, N. | Thurtle, E. |
| Ede, J. C. | Mainwaring, W. H. | Tinker, J. J. |
| Edwards, A. (Middlesbrough E.) | Marshall, F. | Tomlinson, G. |
| Edwards, Sir C. (Bedwellty) | Mathers, G. | Viant, S. P. |
| Evans, E. (Univ. of Wales) | Maxton, J. | Walker, J. |
| Foot, D. M. | Montague, F. | Watkins, F. C. |
| Gallacher, W. | Morrison, R. C. (Tottenham, N.) | Watson, W. McL. |
| Gardner, B. W. | Muff, G. | Wedgwood, Rt. Hon. J. C. |
| Garro Jones, G. M. | Naylor, T. E. | Welsh, J. C. |
| George, Major G. Lloyd (Pembroke) | Noel-Baker, P. J. | Westwood, J. |
| Green, W. H. (Deptford) | Paling, W. | Whiteley, W. (Blaydon) |
| Greenwood, Rt. Hon. A. | Parker, J. | Wilkinson, Ellen |
| Grenfell, D. R. | Parkinson, J. A. | Wilson, C. H. (Attereliffe) |
| Griffiths, J. (Llanelly) | Pearson, A. | Windsor, W. (Hull, C.) |
| Groves, T. E. | Pethick-Lawrence, Rt. Hon. F. W. | Woods, G. S. (Finsbury) |
| Hall, G. H. (Aberdare) | Poole, C. C. | Young, Sir R. (Newton) |
| Hall, J. H. (Whitechapel) | Pritt, D. N. | TELLERS FOR THE AYES.— |
| Hardie, Agnes | Quibell, D. J. K. | Mr. G. R. Strauss and Mr. Bellenger. |
| Harris, Sir P. A. | Rathbone, Eleanor (English Univ's.) | |
| Harvey, T. E. (Eng. Univ's.) | Richards, R. (Wrexham) | |
| NOES. | ||
| Acland-Troyte, Lt.-Col. G. J. | Beit, Sir A. L. | Brocklebank, Sir Edmund |
| Allen, Col. J, Sandeman (B'knhead) | Bennett, Sir E. N. | Brown, Rt. Hon. E. (Leith) |
| Baldwin-Webb, Col. J. | Bernays, R. H. | Brown, Brig.-Gen. H. C. (Newbury) |
| Balfour, Capt. H. H. (life of Thanet) | Bossom, A. C. | Browne, A. C. (Belfast, W.) |
| Barrie, Sir C. C. | Boulton, W. W. | Bolt, B. B. |
| Beamish, Rear-Admiral T. P. H. | Boyce, H. Leslie | Bullock, Capt. M. |
| Beauchamp, Sir B. C. | Brass, Sir W. | Burgin, Rt. Hon. E. L. |
| Beaumont, Hon. R. E. B. (Portsm'h) | Briscoe, Capt. R. G. | Butcher, H. W. |
| Caine, G. R. Hall- | Holmes, J. S. | Remer, J. R. |
| Carver, Major W. H. | Hopkinson, A. | Rickards, G. W. (Skipton) |
| Cary, B. A. | Honsbrugh, Florence | Rosbotham, Sir T. |
| Cazalet, Thelma (Islington, E.) | Howitt, Dr. A. B. | Ross Taylor, W. (Woodbridge) |
| Channon, H. | Hudson, Capt. A. U. M. (Hack., N) | Rowlands, G. |
| Chapman, A. (Rutherglen) | Hulbert, Squadron-Leader N. J. | Royds, Admiral Sir P. M. R. |
| Chapman, Sir S. (Edinburgh, S.) | Hunloke, H. P. | Ruggles-Brise, Colonel Sir E. A. |
| Chorlton, A. E. L. | Hunter, T. | Russell, Sir Alexander |
| Clarke, Colonel R. S. (E. Grinstead) | Hutchinson, G. C. | Russell, S. H. M. (Darwen) |
| Clydesdale, Marquess of | Jarvis, Sir J. J. | Sandeman, Sir N. S. |
| Cobb, Captain E. C. (Preston) | Jennings, R. | Sanderson, Sir F. B. |
| Conant, Captain R. J. E. | Joel, D. J. B. | Scott, Lord William |
| Cook, Sir T. R. A. M. (Norfolk, N.) | Jones, L. (Swansea W.) | Selley, H. R. |
| Cooke, J. D. (Hammersmith, S.) | Keeling, E. H. | Shepperson, Sir E. W. |
| Courthope, Col. Rt. Hon. Sir G. L. | Kerr, Colonel C. l. (Montrose) | Simon, Rt. Hon. Sir J. A. |
| Cox, H. B. Trevor | Kimball, L. | Sinclair, Col. T. (Queen's U. B'lf'st) |
| Craven-Ellis, W. | Knox, Major-General Sir A. W. F. | Smith, Sir R. W. (Aberdeen) |
| Crooke, Sir J. Smedley | Lamb, Sir J. Q. | Smithers, Sir W. |
| Crookshank, Capt. Rt. Hon. H. F. C. | Lancaster, Lieut.-Colonel C. G. | Snadden, W. McN. |
| Crossley, A. C. | Leighton, Major B. E. P. | Somerset, T. |
| Crowder, J. F. E. | Liddall, W. S. | Somervell, Rt. Hon. Sir Donald |
| Cruddas, Col. B. | Little, J. | Somerville, Sir A. A. (Windsor) |
| Davison, Sir W. H. | Lloyd, G. W. | Southby, Commander Sir A. R. J. |
| De Chair, S. S. | Locker-Lampson, Comdr. O. S. | Storey, S. |
| De la Bère, R. | MacAndrew, Colonel Sir C. G. | Strickland, Captain W. F. |
| Despencer-Robertson, Major J. A. F. | McCorquodale, M. S. | Stuart, Lord C. Crichton- (N'thw'h) |
| Drewe, C. | McEwen, Capt. J. H. F. | Stuart, Rt. Hon. J. (Moray and Nairn) |
| Dugdale, Captain T. L. | Magnay, T. | Sueter, Rear-Admiral Sir M. F. |
| Duggan, H. J. | Makins, Brigadier-General Sir Ernest | Sutcliffe, H. |
| Duncan, J. A. L. | Margesson, Capt. Rt. Hon. H. D. R. | Tale, Mavis C. |
| Dunglass, Lord | Markham, S. F. | Taylor, C. S. (Eastbourne) |
| Eastwood, J. F. | Maxwell, Hon. S. A. | Taylor, Vice-Adm. E. A. (Padd., S.) |
| Eckersley, P. T. | Medlicott, F. | Thomas, J. P. L. |
| Edmondson, Major Sir J. | Mellor, Sir J. S. P. (Tamworth) | Thornton-Kemsley, C, N. |
| Errington, E. | Mills, Sir F. (Leyton, E) | Train, Sir J. |
| Erskine Hill, A. G. | Mills, Major J. D. (New Forest) | Tree, A. R. L. F, |
| Evans, Colonel A. (Cardiff, S.) | Mitchell, Sir W. Lane (Streatham) | Tryon, Major Rt. Hon. G. C. |
| Everard, Sir William Lindsay | Mitcheson, Sir G. G. | Tufnell, Lieut.-Commander R. L. |
| Fox, Sir G. W. G. | Moore, Lieut.-Col. Sir T. C. R. | Turton, R. H. |
| Furness, S. N. | Morgan, R. H. (Worcester, Stourbridge) | Wallace, Capt. Rt. Hon, Euan |
| Gluckstein, L. H. | Morris, O. T. (Cardiff, E.) | Ward, Lieut.-Col. Sir A. L. (Hull) |
| Glyn, Major Sir R. G. C. | Morrison, G. A. (Scottish Univ's.) | Ward, Irene M. B. (Wallsend) |
| Graham, Captain A. C. (Wirral) | Munro, P. | Wardlaw-Milne, Sir J. S. |
| Granville, E. L. | Neven-Spence, Major B. H. H. | Warrender, Sir V. |
| Gretton, Col. Rt. Hon. J. | Nicholson, G. (Farnham) | Waterhouse, Captain C. |
| Gridley, Sir A. B. | O'Connor, Sir Terence J. | Watt, Lt.-Col. G. S. Harvie |
| Grimston, R. V. | Palmer, G. E. H. | Wells, Sir Sydney |
| Guinness, T. L. E. B. | Peake, O. | Winterton, Rt. Hon. Earl |
| Hambro, A. V. | Perkins, W. R. D. | Wise, A. R. |
| Hannah, I. C. | Petherick, M. | Womersley, Sir W.J. |
| Harbord, Sir A. | Pickthorn, K. W. M. | Wragg, H. |
| Haslam, Henry (Horncastle) | Pilkington, R. | Wright, Wing-Commander J. A. C. |
| Heilgers, Captain F. F. A, | Plugge, Capt. L. F. | York, C. |
| Hely-Hutchinson, M. R. | Procter, Major H. A. | Young, A. S. L. (Partick) |
| Hepworth, J. | Ramsay, Captain A. H. M. | TELLERS FOR THE NOES.— |
| Herbert, Lt.-Col. J. A. (Monmouth) | Ramsbotham, Rt. Hon. H. | Sir Herbert Williams and Sir Patrick Hannon. |
| Higgs, W. F. | Rayner, Major R. H. | |
| Hoare, Rt. Hon. Sir S. | Reed, A. C. (Exeter) | |
| Holdsworth, H. | Reed, Sir H. S. (Aylesbury) |