Lieutenant-Colonel MALONEasked the Chancellor of the Exchequer if he will say on what principle does the Treasury act in determining the weekly addition to the Treasury notes put into circulation; and what limit, if any, is it intended to place on the issue of such notes?
Mr. CHAMBERLAINThe amount of currency notes issued is determined not by the Treasury but by the demand of the public for currency as expressed in the amount drawn by the banks in the form of currency notes from their balances at the Bank of England. This demand in its turn depends largely on the rate of expenditure, both public and private. It is these factors and not any arbitrary act of Government which primarily fix the limits of the issues.