§ 48. Mr. Woodburnasked the Chancellor of the Exchequer whether he will consider arranging for the payment of wages twice a week or on a staggered system during the week and make the existing currency do more work as an alternative to increasing the fiduciary issue of notes with the consequent danger of an uncontrolled expansion of credit by the joint stock banks?
§ Sir K. WoodNo, Sir. An increase in the fiduciary note issue does not in present circumstances involve the danger which my hon. Friend fears. The volume of notes in circulation is governed by the public demand for them, and that demand is largely determined by the volume of employment caused by the Government's war expenditure and by the methods by which that expenditure is financed. The Government's financial policy is directed towards precluding the possibility of an unnecessary expansion of credit in any form.
§ Mr. WoodburnWhile appreciating that answer, is it not the case that the volume of notes will also increase the volume of notes lying in the banks at certain times and enable the banks to issue more credit on account of this; and will the right hon. Gentleman also consider this subject from the point of view that the staggering of wages would be a great convenience to distributive trades in making purchases spread over the week instead of on one day?
§ Sir K. WoodYes, Sir. I appreciate the last point put by my hon. Friend, but I think that, though his proposal about wage payments is presumably to secure economy in the use of bank notes, it would scarcely have any appreciable effect even in that direction. Any saving in the amount of bank notes would be non recurrent and confined at the most to those issued early in the first week of the change.