§ Mr. JESSONasked the Chancellor of the Exchequer if his attention has been called to proposals now being made advocating that public authorities should be allowed to issue bonds bearing no interest for carrying out public works, such bonds to be negotiable as legal tender and accepted as such for the payment of local rates, and to be redeemable by regular instalments from the local rates within a definite period of time; what effect such a proposal, if adopted, would have 1155W upon the money market and the currency of the country; whether the Treasury has ever sanctioned such an experiment; and, if so, with what result?
§ Sir R. HORNEI do not know to what special proposals the hon. Member refers, but suggestions on similar lines are being constantly put forward with equally little reason to commend them. The effect of giving legal tender privileges to issues of bonds, whether interest bearing or not, would be similar to, though possibly more disastrous than, that of other methods of depreciating the currency and creating a new volume of immediately exerciseable purchasing power without any corresponding addition to the volume of immediately consumable goods and services. The answer to the third part of the question is in the negative; and the last part does not arise.