Mr. A. T. DAVIES
asked the Chancellor of the Exchequer what has been the total reduction in currency notes from 1st October to 27th November, inclusive; what special measures, if any, have been taken for a deflation in currency during that period; what are the main causes of that construction; and whether he ascribes the drop in prices of clothing and other necessaries to those causes?
The reduction of currency notes in the period from 6th October to 24th November has been £6,500,000. No special measures have been taken for a deflation of the currency during that period. As to the main causes of the contraction, while I am not prepared to dogmatise, I attach importance to the money market pressure against inflated credits and to the action of the Government early in the year in balancing Budget expenditure from Budget revenue. The period specified by my hon. Friend also included the coal strike. I should be inclined to agree in the suggestion in the last part of the question, that both the fall of prices and the contraction of the currency are parallel consequences of a common cause.