§ 54. Mr. Craven-Ellisasked the Chancellor of the Exchequer from what source the banks are obtaining the means to make advances to the Treasury known as bank deposits; and is it intended to liquidate these borrowings from the sale of National Savings Certificates or bonds?
§ Sir K. WoodThe banks are able to lend to the Government by way of Treasury deposit receipts as a result of the increased liquid funds in their hands arising from the increase in their customers' deposits. As regards the second part of the Question, the proceeds of sales of Government securities to the public are not earmarked to particular purposes but, along with the proceeds of taxation, are available to meet all Government expenditure, including the repayment of short-term debt.
§ Mr. Craven-EllisHave not these credits been brought into existence by the action of the banks, and is it not advisable at this time that the Government should be responsible for the creation of credit for war purposes?
§ Sir K. WoodI have already answered various questions which my hon. Friend has put.
§ Mr. ShinwellDoes not the right hon. Gentleman realise that we must adopt a new conception of finance if we are to win the war?
§ Sir K. WoodI have no doubt that my hon. Friend would agree to adopt the suggestions that have been made by his hon. Friends.