§ 61. Colonel Crosthwaite-Eyre
asked the Chancellor of the Exchequer the disposal of sums received by His Majesty's Government from merchants of this country for goods purchased by His Majesty's Government from moneys made available to them under the American Loan.
§ Mr. Glenvil Hall
With the hon. Member's permission, I will circulate a statement of the accounting arrangements in the OFFICIAL REPORT.
Will the Financial Secretary state whether these moneys are taken into current account and included in the Budget and are more than responsibile for what surplus is shown?
§ Mr. Glenvil Hall
The hon. and gallant Gentleman must be under considerable misapprehension. There is no secret about this. These figures are published every week in the Exchequer Return, and if he cares afterwards I will show him exactly where to find them.
Following is the statement:
Dollars made available under the American Loan are received into the Exchange Equalisation Account and this Account pays the sterling equivalent to the Exchequer. These sterling receipts are brought to account in the Exchequer Statement (published weekly) under the 1198 heading: "Money raised by creation of debt, Other debt—external."
The dollars thus received by the Exchange Account are available for sale to importers of American goods whether traders or Government Departments (e.g. Ministry of Food) and any dollars made available to these importers are paid for in sterling (in the case of Government Departments from Votes of Parliament) to the Exchange Account. Proceeds of the sale of goods by Government Departments are brought to credit in the account of the Vote that pays for the goods.
The net result of these transactions is that the sterling proceeds of all purchases made with dollars derived from the American Loan (whether the purchaser is a Government Department or a private trader) reduce Exchequer borrowings from other sources, i.e., external debt replaces internal debt.