§ Mr. Craven-Ellisasked the Chancellor of the Exchequer (1) whether he will take measures to replenish both the cash reserves of the banks and the volume of tender bills available to the market in order to restore conditions favourable to the task of successfully financing the Government's needs now impending;
(2) Whether he is aware that the joint stock banks try to maintain a liquidity position of at least 30 per cent., in which is included cash, money at call, and bills discounted, and that their liquidity has now been reduced to 25.3 per cent., which is the lowest figure touched since the beginning of the cheap money policy adopted in 1932; and what steps does he propose to take to strengthen the banking position?
§ Sir J. SimonAs regards the volume of Treasury Bills which are in circulation, I would refer my hon. Friend to the reply which I gave him on the 30th March and 1637W in which I indicated that the amount of Treasury Bills in circulation would be likely to increase. Bankers' deposits at the Bank of England showed a temporary reduction between March and April though the total deposits at the bank remained virtually unchanged, but I am not aware that the banks experienced any such shortage of cash as would embarrass them in fulfilling any of their normal functions. For the reason which I gave in my reply to the hon. Member for Bassetlaw (Mr. Bellenger) on 16th May, in matters of this type it is not possible to lay down in advance possible courses of action without regard to the particular circumstances which may at any time be present.