§ 57. Mr. Loftusasked the Chancellor of the Exchequer whether he is aware that 1582 the deposits of the joint stock banks have increased by over £300,000,000 since the outbreak of war; and whether, as this increase represents additional money brought into existence by the action of the banks in supplying the Treasury with funds which they create without cost to themselves, but upon which the Government pays interest to the banks, he will consider amending the law so that any further issue of such money, which may be necessary, shall be made upon the authority, and to the benefit, of His Majesty's Treasury, and not upon the authority and to the benefit of any private interests?
§ Sir K. WoodI am aware of the increase in the deposits of the banks but cannot accept the suggestions in the rest of my hon. Friend's Question. In so far as the increase has been due to the increased expenditure of Government funds those funds have been provided in the main by means other than borrowing from the banks. Two-thirds of the increase in bank deposits had in fact incurred before the Treasury began to borrow from the banks by means of Treasury deposit receipts.
§ Mr. LoftusIs not my right hon. Friend aware that this borrowing of newly created money is dangerously increasing the floating debt, a practice which my right hon. Friend condemned at Leeds on 13th September; and, if it is to continue, will he arrange that these newly created credit moneys are created by the State and not by a private monopoly?
§ Sir K. WoodI cannot go into that question.
§ Mr. BevanIs the right hon. Gentleman aware that there is a universal demand for him to adopt modern methods in financing this war; and does he not realise that a general impression is abroad that the Treasury is as backward as was the French Army?
§ Sir K. WoodNo, Sir; I do not think so.