§ 27. Mr. Nabarro
asked the President of the Board of Trade what estimate he has made of the effects on overseas trade of the United Kingdom resulting from depletion of the gold reserves of the United States of America.
§ Mr. Erroll
It is the measures taken by the United States Government to deal with the reduction in gold reserves rather than the reduction itself that may affect trade. Those so far taken should not have any serious effect. My right hon. Friend is watching the situation closely.
§ Mr. Nabarro
In view of many possible dangers which may arise in the next few weeks if there is intensification of the measures already taken by the United States of America, can my hon. Friend assure the House not only that this matter will be kept under continuous review, but that if necessary conversations will be initiated by Her Majesty's Government?
§ Mr. Jay
Is there not a danger here of competitive deflation with everybody trying to defend their own gold reserves? Instead of merely watching, will not the Government consult the American and, indeed, the German Governments to see whether we cannot have a policy of lower interest rates all round?
§ Mr. Erroll
This is not just a matter of interest rates. The satisfactory feature of the present situation is that the United States is not applying measures to tackle its balance of payments problem in such a way as to restrict normal commercial trading.
§ Mr. Manuel
Would the right hon. Gentleman not agree that instead of the President of the Board of Trade watching, waiting, hoping and praying for a lucky chance to arise and for something to turn up, the Government should take constructive action to shape the course of events and not be satisfied continually with giving these evasive answers which we get all the time from the Box?