§ 62. Mr. Woodburnasked the Chancellor of the Exchequer, in oases where banks transfer their lending to the Government from Treasury deposits at 1⅛ per cent. to National War Bonds at 2½ per cent., what steps are taken to ensure that the investments in War Bonds are restricted to genuine savings, resulting in the contraction of private spending, and that the Treasury is not paying the additional 1⅜ per cent. interest on bank-created credits?
§ Sir K. WoodThe money out of which the banks lend to the Government is, broadly speaking, derived from deposits made by customers in the ordinary course of their business, and there is no question of banks creating credit for the purpose of lending money to the Government. I should add that only a part of such portion of the Treasury Deposit Receipts held by the banks as has been redeemed is on the banks' own accounts, the remainder being in respect of subscriptions by customers.