Sir F. HALLasked the Chancellor of the Exchequer if the advance in the Bank rate and the rate of interest on Treasury Bills has had an adverse effect on the London County Council Loan and on the arrangements for the raising of housing bonds; on what date the decision to take this step was come to; and if it was disclosed before the arrangements were made to float the London Loan?
Mr. CHAMBERLAINI explained in my Budget speech the reasons for the recent increase in Treasury Bill rates I understand that underwriters of the London County Council had to take up 90 per cent. of the issue, but that since that date a considerable demand for the issue has been visible in the market. The London County Council itself was not, of course, directly prejudiced. I do not think the campaign for issuing housing bonds should be materially affected by a temporary increase in the rate for short money, the appeal for subscriptions being directed to investors of a different kind. In any case it is obvious that the general interests of the community would not be served if I were to refrain, in the supposed interests of housing finance,1254W from taking steps which are necessary to prevent further inflation of credit and currency. The objections to the manufacture of credit by the Government for purposes of its own requirements apply equally to the manufacture of credit by the Government for purposes of housing finance.