HC Deb 30 September 1915 vol 74 cc1016-7W

asked the Chancellor of the Exchequer if he will state what record exists at the Treasury in reference to the suspension of the Bank Act at the outbreak of War, dealt with in this House on 5th August, 1914, by the then Chancellor of the Exchequer, who said that the Government had already taken steps, in the anticipation of a possible emergency, to suspend the Bank Act in order to enable the bankers to secure an adequate supply of notes, and that they came to the conclusion that it was not necessary to suspend specie payments; at what date and hour were steps taken to suspend the Bank Act; what were their nature; was any letter written by the Chancellor to the Bank of England upon the precedents of 1847, 1857, and 1866; if so, on what day and hour was such letter despatched; was any reply received thereto, and at what date and hour; can the nature of the reply of the bank be furnished to the House; in case it was oral, has any record been preserved; on what day and hour was the decision taken to close the stock exchanges and on whose advice; to how many persons outside the Government, and to whom, had communications with the Bank of England been made known by 3 p.m. on the 5th August, 1914; are the records relating to the War crisis regarded by the Treasury as personal to the then Chancellor of the Exchequer or as available for submission to Parliament; what is the net loss, or responsibility for loss, on German, Austrian, or Turkish bills of exchange incurred by the Government; and what is the estimated net liability otherwise incurred to banks or members of the Stock Exchange in consequence of the outbreak of war?


I am causing a copy of the letters exchanged with the Bank of England on the 1st August, 1914, on the subject of the so-called "Suspension of the Bank Act" to be presented to the House. I have no record of the hour at which the letter from the Bank of England was received or the reply despatched. The correspondence was treated as confidential until the announcement of the Chancellor of the Exchequer to the House of Commons on the 5th August.

The decision to close the Stock Exchange was taken by the Stock Exchange Committee on their own initiative, without reference to the Treasury.

The liabilities at present outstanding in respect of bills of exchange, assistance given by the Government to banks and members of the Stock Exchange, have already been reduced to about £38,000,000. Most of the outstanding advances are regarded as adequately secured, and the ultimate loss, if any, is likely to be small.